Murdock Company prepares monthly cash budgets. Relevant data from operating budgets for 2017 are:

JanuaryFebruary

Sales$350,000$400,000

Direct materials purchases120,000110,000

Direct labor85,000112,000

Manufacturing overhead60,00075,000

Selling and administrative expenses75,00080,000

All sales are on account. Collections are expected 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. Thirty percent (30%) of direct materials purchases are paid in cash in the month of purchase, and the balance due is paid in the month following the purchase. All other items above are paid in the month incurred. Depreciation has been excluded from manufacturing overhead and selling and administrative expenses.

Other data:

1. Credit sales: November 2016, $200,000; December 2016, $280,000.

2. Purchases of direct materials: December 2013, $80,000.

3. Other receipts: JanuaryCollection of December 31, 2016, interest receivable $5,000;

FebruaryProceeds from sale of securities $6,000.

4. Other disbursements: Februarypayment of $20,000 for land.

The company's cash balance on January 1, 2017, is expected to be $50,000. The company wants to maintain a minimum cash balance of $40,000.

Instructions

Prepare e a cash budget for January and February in columnar form.