Lorch Company prepares monthly cash budgets. Relevant data from operating budgets for 2021 are as follows: January February Sales $349,000 $400,000 Direct materials purchases 120,000 109,000 Direct labour 85,000 114,000 Manufacturing overhead 60,000 76,000 Selling and administrative expenses 75,000 81,000 All sales are on account. Lorch expects collections to be 50% in the month of sale, 40% in the first month following the sale, and 10% in the second month following the sale. It pays 30% of direct materials purchases in cash in the month of purchase and the balance due in the month following the purchase. Other data are as follows: 1. Credit sales: November 2020, $200,000; December 2020, $282,000 2. Purchases of direct materials: December 2020, $91.000 3. Other receipts: January-collection of December 31, 2020, notes receivable $5,000; February-proceeds from sale of securities $7,000 4. Other disbursements: February-payment of $20,000 for land The company expects its cash balance on January 1, 2021, to be $50,000. It wants to maintain a minimum cash balance of $41,000. Month January February December January February