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Please state the answers clearly + show calculations. I'll make sure to rate! Question 30 Lorch Company prepares monthly cash budgets. Relevant data from operating
Please state the answers clearly + show calculations. I'll make sure to rate!
Question 30 Lorch Company prepares monthly cash budgets. Relevant data from operating budgets for 2021 are as follows: Sales Direct materials purchases Direct labour Manufacturing overhead Selling and administrative expenses January $353,000 120,000 85,000 59,000 75,000 February $398,000 111,000 111,000 74,000 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, $198,000; December 2020, $279,000 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 $5,000 4. Other disbursements: February-payment of $20,000 for land The company expects its cash balance on January 1, 2021, to be $49,000. It wants to maintain a minimum cash balance of $39,000. 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 FebruaryStep by Step Solution
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