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Blue Company prepares monthly cash budgets. Relevant data from operating budgets for 2017 are as follows: January February Sales $430,560 $478,400 Direct materials purchases 143,520 149,500 Direct labor 107,640 119,600 Ma nufactu ring over head 83,720 8 9 .700 Selling and administrative expenses 94,434 101,660 All sales are on account. Collections are expected to be 50% in the month of sale, 30% in the rst month following the sale, and 20% in the second month following the sale. Sixty percent (60%] of direct materials purchases are paid in cash in the month of purchase, and the balance due is paid in the month fol lowing the purchase. All other items above are paid in the month incurred except for selling and administrative expenses that include $1,196 of depreciation per month. Other data: 1. Credit sales: November 2016, $299,000; December 2016, $382,720. 2. Purchases of direct materials: December 2016, $ 119,600. 3. Other receipts: JanuaryCol lection of December 31, 2016, notes receivable $ 17,940; February Proceeds from sale of securities $7,176. 4. Other disbursements: Februarv Payment of $7,176 cash dividend. The company's cash balance on January 1, 2017, is expected to be $71,760. The company wants to maintain a minimum cash balance of $59,800. (b) Prepare a cash budget for January and February in columnar form. (Do not leave any answer field blank. Enter 0 for amounts.} BLUE COMPANY Cash Budget January Notes Receivable Repayments Collections from Customers Direct Materials Ending Cash Balance Direct Labor Receipts Cash Dividend Manufacturing Overhead Selling and Administrative Expenses Sale of Securities Total Available Cash Beginning Cash Balance Total Disbursements Excess (Deficiency) of Available Cash Over Cash Disbursements Financing Borrowings Total Receipts Disbursements eTextbook and Media Save for Later Attempts: 0 of 3 used Submit Answer(bi Prepare a cash budget for January and February in columnar form. (Do not leave any answer field blank. Enter 0 for amounts.] BLUE COMPANY Cash Budget January eTextbook and Media Save for Later Attempts: 0 of 3 used Submit Answer(b) Prepare a cash budget for January and February in columnar form. (Do not leave any answer field blank. Enter 0 for amounts.} BLUE COMPANY Cash Budget January February # $ eTextbook and Media Save for Later Attempts: 0 of 3 used Submit Answer(a) Your answer is correct. Prepare schedules for (1) expected collections from customers and (2) expected payments for direct materials purchases for January and February. Expected Collections from Customers January February November to 59800 i December 114816 76,544 January 215280 129,168 February i 239,200 Total collections 389,896 $ 444,912 Expected Payments for Direct Materials January February December 47.840 i January 86,112 57,408 February i 89,700 Total payments $ 133,952 $ 147,108 eTextbook and Media Attempts: 1 of 3 used
