Problem 13-4 (Part Level Submission) Pronghorn Company prepares monthly cash budgets. Relevant data from operating budgets for 2017 are as follows: Sales Direct materials purchases Direct labor Manufacturing overhead Selling and administrative expenses January $375,840 125,280 93,960 73,080 82,476 February $417,600 130,500 104,400 78,300 88,740 All sales are on account. Collections are expected to be 50% in the month of sale, 30% in the first 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 following the purchase. All other items above are paid in the month incurred except for selling and administrative expenses that include $1,044 of depreciation per month. Other data: 1. 2. 3. Credit sales: November 2016, $261,000; December 2016, $334,080. Purchases of direct materials: December 2016, $104,400. Other receipts: January-Collection of December 31, 2016, notes receivable $15,660; February-Proceeds from sale of securities $6,264. Other disbursements: February-Payment of $6,264 cash dividend. 4. The company's cash balance on January 1, 2017, is expected to be $62,640. The company wants to maintain a minimum cash balance of $52,200. (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 52200 PRONGHORN COMPANY Cash Budget For the Two Months Ending February 28, 2017 January February Beginning Cash Balance 62640 52200 Add Collections from Customers Notes Receivable 15560 X 15660 Less X X x IX X ill deciitili X Ending Cash Balance $