Brampton Manufactures has a line of credit with their bank and must keep a $$20,000$ minimum balance each month. There is no outstanding loan at the beginning of January. Loans can be borrowed and repaid in any amount. The cash balance on January $1$ is expected to be $$25,000.$

Sales were $$35,000$ in December, and are budgeted to be $$60,000$ in January and $$90,000$ in February. All sales are on account and are collected $50\%$ in the month of sale and $50\%$ in the following month.

All other expenses are listed below, and are all paid in cash in the month incurred:

Direct materials $$20,000$ per month

Sales Commissions $10\%$ of sales per month

MOH $$19,000$ per month and includes depreciation of $$2,000$ monthly

Selling & Admin Exp $$10,000$ per month and excludes depreciation of $$2,000$ monthly

Interest on borrowing is $$10$ per month

Instruction:

Prepare a cash budget for January and February for Brampton Manufactures

January

February

Beginning Cash Balance

Cash Receipts

Cash Available

Cash Payments

Total

Surplus$/$deficit

Finance

Borrow

Repay

Repay interest

Ending Cash balance