Bramble Company expects to have a cash balance of $45,400 on January 1, 2022. Bramble has budgeted
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Question:
Bramble Company expects to have a cash balance of $45,400 on January 1, 2022. Bramble has budgeted the following for the first two months of the year 2022:
1. | Collections from customers: January $89,800; February $109,400. | ||
2. | Payments to suppliers: January $39,700; February $49,900. | ||
3. | Direct labour: January $30,000; February $35,200. Wages are paid in the month they are incurred. | ||
4. | Manufacturing overhead: January $24,800; February $30,300. Overhead costs are paid as incurred. | ||
5. | Selling and administrative expenses: January $15,800; February $22,000. These costs do not include depreciation and they are paid as incurred. | ||
6. | Sales of investments in January are expected to realize $10,000 in cash. Bramble Company wants to keep a minimum monthly cash balance of $20,000. Ignore any interest on amounts borrowed. |
Prepare a cash budget for January and February.
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