Question
Colter Company prepares monthly cash budgets. Relevant data from operating budgets for 2020 are as follows. January February Sales $421,200 $468,000 Direct materials purchases 140,400
Colter Company prepares monthly cash budgets. Relevant data from operating budgets for 2020 are as follows. January February Sales $421,200 $468,000 Direct materials purchases 140,400 146,250 Direct labor 105,300 117,000 Manufacturing overhead 81,900 87,750 Selling and administrative expenses 92,430 99,450 All sales are on account. Collections are expected to be 50% in the month of sale, 30% in the first month following the sale, and 20% in the second month following the sale. Sixty percent (60%) 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 items above are paid in the month incurred except for selling and administrative expenses that include $1,170 of depreciation per month. Other data: 1. Credit sales: November 2019, $292,500; December 2019, $374,400. 2. Purchases of direct materials: December 2019, $117,000. 3. Other receipts: JanuaryCollection of December 31, 2019, notes receivable $17,550; FebruaryProceeds from sale of securities $7,020.
4. | Other disbursements: FebruaryPayment of $7,020 cash dividend. |
The companys cash balance on January 1, 2020, is expected to be $70,200. The company wants to maintain a minimum cash balance of $58,500.
Prepare schedules for (1) expected collections from customers and (2) expected payments for direct materials purchases for January and February.
Expected Collections from Customers | ||||
---|---|---|---|---|
January | February | |||
November | $enter a dollar amount | $enter a dollar amount | ||
December | enter a dollar amount | enter a dollar amount | ||
January | enter a dollar amount | enter a dollar amount | ||
February | enter a dollar amount | enter a dollar amount | ||
Total collections | $enter a total amount | $enter a total amount |
Expected Payments for Direct Materials | ||||
---|---|---|---|---|
January | February | |||
December | $enter a dollar amount | $enter a dollar amount | ||
January | enter a dollar amount | enter a dollar amount | ||
February | enter a dollar amount | enter a dollar amount | ||
Total payments | $enter a total amount
| $enter a total amount
\ Prepare a cash budget for January and February in columnar form. |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started