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Problem 9-4A Colter Company prepares monthly cash budgets. Relevant data from operating budgets for 2017 are as follows: February January Sales $382,320 $424,800 Direct materials
Problem 9-4A Colter Company prepares monthly cash budgets. Relevant data from operating budgets for 2017 are as follows: February January Sales $382,320 $424,800 Direct materials purchases 127,440 132,750 Direct labor 95,580 106,200 79,650 Manufacturing overhead 74,340 Selling and administrative expenses 83,898 90,270 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 $1,062 of depreciation per month Other data: 1. Credit sales: November 2016, $265,500; December 2016, $339,840 2. Purchases of direct materials: December 2016, $106,200. 3. Other receipts: January-Collection of December 31, 2016, notes receivable $15,930; February-Proceeds from sale of securities $6,372. 4. Other disbursements: February Payment of $6,372 cash dividend. The company's cash balance on January 1, 2017, is expected to be $63,720. The company wants to maintain a minimum cash balance of $53,100
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