Lorch Company prepares monthly cash budgets. Relevant data from operating budgets for 2021 are as follows: January February Sales $349,000 $404.000 119.000 111,000 86,000 111.000 Direct materials purchases Direct labour Manufacturing overhead Selling and administrative expenses 61,000 74,000 74,000 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 1 in the second month following the sale. It pays 30% of direct materials purchases in cash in the month of purchase and the balanc due in the month following the purchase. Other data are as follows: 1. Credit sales: November 2020, $198,000; 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 $6,000 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 $40,000 Prepare schedules for (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 $ LORCH COMPANY Cash Budget For the Two Months Ending February 28, 2021 Jan Feb Beginning cash balance Add:Cash receipts > Total receipts Total available cash Less: Disbursements Total disbursements Excess of cash available over cash disbursements Financing Borrowing Total financing $ Ending cash balance |