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Blossom Company expects to have a cash balance of $23,000 on January 1,2022 . These are the relevant monthly budget data for the first two
Blossom Company expects to have a cash balance of $23,000 on January 1,2022 . These are the relevant monthly budget data for the first two months of 2022. 1. Collections from customers: January $35,500, February $73,000. 2. Payments to suppliers: January $20,000, February $37,500. 3. Wages: January $15,000, February $20,000. Wages are paid in the month they are incurred. 4. Administrative expenses: January $10,500, February $12,000. These costs include depreciation of $500 per month. All other costs are paid as incurred. 5. Selling expenses: January $7,500, February $10,000. These costs are exclusive of depreciation. They are paid as incurred. 6. Sales of short-term investments in January are expected to realize $6,000 in cash. Blossom Company has a line of credit at a local bank that enables it to borrow up to $12,500. The company wants to maintain a minimum monthly cash balance of $10,000. For the Two Months Ending February 28, 2022 Beginning cash balance Sale of short-term investments Total available cash Payments to suppliers Wages Administrative expenses Total disbursements Repayments Selling expenses Excess (deficiency) of available cash over disbursements Borrowings Financing Ending cash balance
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