Colter Company prepares monthly cash budgets. Relevant data from operating budgets for 2020 are as follows.

January

February

Sales$432,000$480,000

Direct materials purchases144,000 150,000

Direct labor108,000 120,000

Manufacturing overhead84,000 90,000

Selling and administrative expenses94,800 102,000

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 $1,200of depreciation per month.

Other data:

1.Credit sales: November 2019, $300,000; December 2019, $384,000.

2.Purchases of direct materials: December 2019, $120,000.

3.Other receipts: JanuaryCollection of December 31, 2019, notes receivable $18,000;FebruaryProceeds from sale of securities $7,200.

4.Other disbursements: FebruaryPayment of $7,200cash dividend.

The company's cash balance on January 1, 2020, is expected to be $72,000. The company wants to maintain a minimum cash balance of $60,000.

Prepare schedules for (1) expected collections from customers and (2) expected payments for direct materials purchases for January and February.

cash budget