Problem 10.38A a-b 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 $349,000 119,000 85,000 60,000 74,000 February $398,000 110,000 111,000 75,000 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, $282,000 2. Purchases of direct materials: December 2020, $89,000 3. Other receipts: January-collection of December 31, 2020, notes receivable $5,000; February-proceeds from sale of securities $7,000 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 $40,000. Prepare schedules for (1) the expected collections from customers. Month January February November $ PRINTER VERSION 4 BACK NEXT Month January February November $ $ December January February $ (2) the expected payments for direct materials purchases. Month January February December $ $ January February $ $ LINK TO TEXT Prepare a cash budget for January and February using columns for each month. Prepare a cash budget for January and February using columns for each month. LORCH COMPANY Cash Budget For the Two Months Ending February 28, 2021 Jan Feb Total Beginning cash balance $ $ $ Add: Cash receipts Total receipts Total available cash Less: Disbursements PRINTER VERSION BACK NEXT Total receipts Total available cash Less: Disbursements Total disbursements Excess of cash available over cash disbursements Financing: Borrowing Total financing Ending cash balance $