Question
Colter Company prepares monthly cash budgets. Relevant Data from operating budgets for 2017 are as follows: January February Sales $367920 $408800 Direct materials purchases 122640
Colter Company prepares monthly cash budgets. Relevant Data from operating budgets for 2017 are as follows:
January | February | |
Sales | $367920 | $408800 |
Direct materials purchases | 122640 | 127750 |
Direct Labor | 91980 | 102200 |
Manufacturing overhead | 71540 | 76650 |
Selling and administrative expenses | 80738 | 86870 |
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 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 $1022 of depreciation per month.
Other data:
1. Credit sales: November 2016 $255500; December 2016 $327040.
2 Purchases of direct materials: December 2016 $102200
3. Other Receipts: January Collection of December 31, 2016 notes receivable $15330;
February Proceeds from sale of securities $6132.
4. Other disbursements: February- Payment of $6132 cash dividend.
The company's cash balance on January 1 2017 is expected to be $61320. The company wnats to maintain a minimum cash balance of $51100.
A. Prepare schedules for 1. expected collections from customers for january and february and 2. expected payments for direct materials purchases for January and February.
B.Prepare a cash budget for January and February in columnar form
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