B) prepare a cash budget

P21-3A Nigh Corporation prepares monthly cash budgets. Relevant data from operating budgets for 2017 Prepare cash bodget. follow: (LO 4) AP Sales Direct materials purchases Direct labour Manufacturing overhead Selling and administrative expenses Jlanuary $350,000 120,000 80,000 70,000 79,000 February $400,000 130,000 100,000 75,000 81,000 Budgetary Planning All sales are on account Collections are expected to be 50% in the month of sale 30% in the first month fol ing the sale, and 20% in the second month following the sale. Sixty percent of direct materials purchases are paid in cash in the month of purchase, and the balance due is paid in the month following the purchase. All other ien above are paid in the month incurred, except for selling and administrative expenses, which include $1,000 d depreciation per month. Other data: 1. Credit sales: November 2016, $260,000; December 2016, $300,000 Purchases of direct materials: December 2016, $100,000 3. Other receipts: January collection of December 31,2016, notes receivable, S15,000 February proceeds from sale 2. of investments, $6,000 4. Other disbursements: February payment of dividends, $5,000 The company's cash balance on January 1, 2017, is expected to be s60,000. The company wants to maintain minimum cash balance of $50,000. structions (a) Prepare schedules for (1) the expected cash collections from customers and (2) the expected payments fo (b) Prepare a cash budget for January and February. irect materials purchases