Barracuda Inc. is preparing its cash budget for the first two months of the year.

The following information is provided.

January

February

Collections from customers

$$110,000$

$$170,000$

Payments to suppliers

$$70,000$

$$80,000$

Direct labour$*$

$$30,000$

$$35,000$

Manufacturing overhead$*($include depreciation of $$1,000$ per month$)$

$$26,000$

$$31,000$

Selling and administrative expenses$*($exclusive of depreciation$)$

$$15,000$

$$15,000$

$*$Assume payments are made in the month incurred

Barracuda Inc. has an open line of credit. The company wants to keep a minimum cash

balance of $$25,000.$ On January $1,$ it had a cash balance of $$45,000.$

Prepare a cash budget for January and February and total for the two months