Lorch Company prepares monthly cash budgets. Relevant data from operating budgets for 2021 are as follows:

January February

Sales $352,000 $398,000

Direct materials purchases 121,000 110,000

Direct labour 85,000 112,000

Manufacturing overhead 60,000 76,000

Selling and administrative expenses75,000 80,000

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, $202,000; December 2020, $278,000

2.Purchases of direct materials: December 2020, $91,0003.Other receipts: Januarycollection of December 31, 2020, notes receivable $6,000; Februaryproceeds from sale of securities $6,000

4.Other disbursements: Februarypayment 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 $40,000.

(1) the expected collections from customers.

Month January February

November

December

January

February

(2) the expected payments for direct materials purchases.

Month January February

December

January

February