Danner Company expects to have a cash balance of $48,150 on January 1, 2020. Relevant monthly budget data for the first 2 months of 2020 are as follows.

Collections from customers: January $90,950, February $160,500.

Payments for direct materials: January $53,500, February $80,250.

Direct labor: January $32,100, February $48,150. Wages are paid in the month they are incurred.

Manufacturing overhead: January $22,470, February $26,750. These costs include depreciation of $1,605 per month. All other overhead costs are paid as incurred.

Selling and administrative expenses: January $16,050, February $21,400. These costs are exclusive of depreciation. They are paid as incurred.

Sales of marketable securities in January are expected to realize $12,840 in cash. Danner Company has a line of credit at a local bank that enables it to borrow up to $26,750. The company wants to maintain a minimum monthly cash balance of $21,400. Prepare a cash budget for January and February.

DANNER COMPANY Cash Budget January February