Lily Company expects to have a cash balance of $37,800 on January 1, 2022. Relevant monthly budget data for the first 2 months of 2022 are as follows.

Collections from customers: January $71,400, February $126,000.

Payments for direct materials: January $42,000, February $63,000.

Direct labor: January $25,200, February $37,800. Wages are paid in the month they are incurred.

Manufacturing overhead: January $17,640, February $21,000. These costs include depreciation of $1,260 per month. All other overhead costs are paid as incurred.

Selling and administrative expenses: January $12,600, February $16,800. These costs are exclusive of depreciation. They are paid as incurred.

Sales of marketable securities in January are expected to realize $10,080 in cash. Lily Company has a line of credit at a local bank that enables it to borrow up to $21,000. The company wants to maintain a minimum monthly cash balance of $16,800.

Prepare a cash budget for January and February.