Illustration - Hayes Company Assumptions 1. The January 1, 2014, cash balance is expected to be $38,000. Hayes wishes to maintain a balance of at least $15,000. 2. Sales 60% are collected in the quarter sold and 40% are collected in the following quarter. Accounts receivable of $60,000 at December 31, 2013, are expected to be collected in full in the first quarter of 2014. 3. Short-term investments are expected to be sold for $2,000 cash in the first quarter. 4. Direct materials 50% are paid in the quarter purchased and 50% are paid in the following quarter. Accounts payable of $10,600 at December 31, 2013, are expected to be paid in full in the first quarter of 2014. Direct labor 5. 6. 100% is paid in the quarter incurred. and selling and All items except Manufacturing overhead administrative expenses depreciation are paid in the quarter incurred. 7. Management plans to purchase a truck in the second quarter for $10,000 cash.