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Lorch Company prepares monthly cash budgets. Relevant data from operating budgets for 2021 are as follows: January February Sales $349,000 $402,000 Direct materials purchases 119,000 109,000 Direct labour 84,000 110,000 Manufacturing overhead 61,000 75,000 Selling and administrative expenses 76,000 79,000 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, $89,000 3. Other receipts: January--collection of December 31, 2020, notes receivable $6,000; 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 $39,000. (1) the expected collections from customers. Month January February November 20200 $ December 111200 27800 January 174500 139600 February 201000 305900 368400 $ (2) the expected payments for direct materials purchases. Month January February December 62300 $ $ January 35700 83300 February 32700 98000 116000 LORCH COMPANY Cash Budget For the Two Months Ending February 28, 2021 Jan Feb Total Beginning cash balance 50000 42900 92900 Add: Cash receipts 305900 368400 674300 6000 0 6000