Exercise 10.27 Nunez Company expects to have a cash balance of $44,000 on January 1, 2020. Relevant monthly budget data for the first two months of 2020 are as follows: 1. 2. 3. Collections from customers: January $100,000; February $159,000 Payments to suppliers: January $61,000; February $79,000 Direct labour: January $30,000; February $43,000. Wages are paid in the month they are incurred. Manufacturing overhead: January $20,000; February $31,000. These costs include depreciation of $1,000 per month. All other overhead costs are paid as incurred. Selling and administrative expenses: January $15,000; February $21,000. These costs are exclusive of depreciation. They are paid as incurred. Sales of marketable securities in January are expected to realize $9,000 in cash. 4. 5. 6. Nunez Company has a line of credit at a local bank. It can borrow up to $26,000. The company wants to keep a minimum monthly cash balance of $22,000. Prepare a cash budget for January and February. NUNEZ COMPANY Cash Budget For the Two Months Ending February 29, 2020 Month Jan Feb Total