Nunez Company expects to have a cash balance of $45,000 on January 1, 2016. Relevant monthly budget data for the first two months of 2016 are as follows:

1.Collections from customers: January $100,000; February $160,0002.Payments to suppliers: January $60,000; February $80,0003.Direct labour: January $30,000; February $45,000. Wages are paid in the month they are incurred.4.Manufacturing overhead: January $26,000; February $31,000. These costs include depreciation of $1,000 per month. All other overhead costs are paid as incurred.5.Selling and administrative expenses: January $15,000; February $20,000. These costs are exclusive of depreciation. They are paid as incurred.6.Sales of marketable securities in January are expected to realize $10,000 in cash.

Nunez Company has a line of credit at a local bank. It can borrow up to $25,000. The company wants to keep a minimum monthly cash balance of $25,000.

We need a cash budget for January and February.