Problem 9-4A

Colter Company prepares monthly cash budgets. Relevant data from operating budgets for 2017 are as follows:

January February Sales $390,960 $434,400 Direct materials purchases 130,320 135,750 Direct labor 97,740 108,600 Manufacturing overhead 76,020 81,450 Selling and administrative expenses 85,794 92,310

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 $1,086 of depreciation per month. Other data:

1. Credit sales: November 2016, $271,500; December 2016, $347,520. 2. Purchases of direct materials: December 2016, $108,600. 3. Other receipts: JanuaryCollection of December 31, 2016, notes receivable $16,290; FebruaryProceeds from sale of securities $6,516. 4. Other disbursements: FebruaryPayment of $6,516 cash dividend.

The companys cash balance on January 1, 2017, is expected to be $65,160. The company wants to maintain a minimum cash balance of $54,300.

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 $ $ December January February Total collections $ $

Expected Payments for Direct Materials January February December $ $ January February Total payments $ $

LINK TO TEXT

Prepare a cash budget for January and February in columnar form. (Do not leave any answer field blank. Enter 0 for amounts.)

COLTER COMPANY Cash Budget For the Quarter Ending February 28, 2017 February 28, 2017 For the Two Months Ending February 28, 2017 January February Beginning Cash Balance Excess (Deficiency) of Available Cash Over Cash Disbursements Cash Dividend Disbursements Financing Selling and Administrative Expenses Borrowings Manufacturing Overhead Receipts Notes Receivable Repayments Sale of Securities Collections from Customers Total Available Cash Total Disbursements Direct Labor Total Receipts Ending Cash Balance Direct Materials $ $ Add Less : Manufacturing Overhead Notes Receivable Excess (Deficiency) of Available Cash Over Cash Disbursements Receipts Selling and Administrative Expenses Repayments Sale of Securities Collections from Customers Total Available Cash Total Disbursements Financing Total Receipts Cash Dividend Beginning Cash Balance Borrowings Direct Labor Direct Materials Disbursements Ending Cash Balance Manufacturing Overhead Collections from Customers Excess (Deficiency) of Available Cash Over Cash Disbursements Total Disbursements Financing Borrowings Cash Dividend Receipts Beginning Cash Balance Sale of Securities Ending Cash Balance Notes Receivable Disbursements Repayments Selling and Administrative Expenses Direct Materials Total Available Cash Total Receipts Direct Labor Beginning Cash Balance Sale of Securities Borrowings Notes Receivable Receipts Excess (Deficiency) of Available Cash Over Cash Disbursements Total Disbursements Collections from Customers Direct Labor Total Receipts Cash Dividend Selling and Administrative Expenses Direct Materials Disbursements Total Available Cash Financing Manufacturing Overhead Repayments Ending Cash Balance Receipts Excess (Deficiency) of Available Cash Over Cash Disbursements Disbursements Ending Cash Balance Notes Receivable Sale of Securities Repayments Direct Labor Collections from Customers Manufacturing Overhead Selling and Administrative Expenses Total Available Cash Borrowings Total Disbursements Total Receipts Direct Materials Cash Dividend Beginning Cash Balance Financing Total Available Cash Disbursements Direct Labor Repayments Beginning Cash Balance Collections from Customers Direct Materials Receipts Total Disbursements Borrowings Ending Cash Balance Total Receipts Financing Excess (Deficiency) of Available Cash Over Cash Disbursements Manufacturing Overhead Notes Receivable Sale of Securities Selling and Administrative Expenses Cash Dividend Direct Materials Cash Dividend Disbursements Ending Cash Balance Receipts Notes Receivable Repayments Sale of Securities Total Receipts Selling and Administrative Expenses Financing Excess (Deficiency) of Available Cash Over Cash Disbursements Collections from Customers Manufacturing Overhead Total Available Cash Total Disbursements Beginning Cash Balance Borrowings Direct Labor Add Less : Manufacturing Overhead Direct Labor Selling and Administrative Expenses Notes Receivable Cash Dividend Financing Receipts Total Available Cash Disbursements Ending Cash Balance Excess (Deficiency) of Available Cash Over Cash Disbursements Repayments Sale of Securities Total Disbursements Total Receipts Direct Materials Beginning Cash Balance Borrowings Collections from Customers Ending Cash Balance Manufacturing Overhead Selling and Administrative Expenses Disbursements Cash Dividend Total Available Cash Notes Receivable Total Disbursements Excess (Deficiency) of Available Cash Over Cash Disbursements Total Receipts Beginning Cash Balance Sale of Securities Receipts Direct Labor Financing Repayments Borrowings Collections from Customers Direct Materials Excess (Deficiency) of Available Cash Over Cash Disbursements Manufacturing Overhead Direct Labor Financing Total Receipts Selling and Administrative Expenses Sale of Securities Receipts Total Disbursements Cash Dividend Repayments Total Available Cash Direct Materials Disbursements Beginning Cash Balance Ending Cash Balance Notes Receivable Borrowings Collections from Customers Total Receipts Total Available Cash Cash Dividend Direct Materials Beginning Cash Balance Receipts Collections from Customers Disbursements Excess (Deficiency) of Available Cash Over Cash Disbursements Total Disbursements Direct Labor Borrowings Repayments Selling and Administrative Expenses Ending Cash Balance Financing Manufacturing Overhead Notes Receivable Sale of Securities Receipts Total Available Cash Sale of Securities Disbursements Manufacturing Overhead Direct Labor Repayments Direct Materials Excess (Deficiency) of Available Cash Over Cash Disbursements Ending Cash Balance Total Disbursements Selling and Administrative Expenses Total Receipts Financing Notes Receivable Cash Dividend Beginning Cash Balance Borrowings Collections from Customers Collections from Customers Total Available Cash Sale of Securities Financing Borrowings Selling and Administrative Expenses Disbursements Notes Receivable Repayments Ending Cash Balance Direct Labor Excess (Deficiency) of Available Cash Over Cash Disbursements Total Disbursements Receipts Direct Materials Manufacturing Overhead Total Receipts Cash Dividend Beginning Cash Balance Direct Materials Selling and Administrative Expenses Notes Receivable Borrowings Disbursements Excess (Deficiency) of Available Cash Over Cash Disbursements Financing Manufacturing Overhead Receipts Repayments Ending Cash Balance Total Available Cash Sale of Securities Collections from Customers Total Disbursements Total Receipts Cash Dividend Beginning Cash Balance Direct Labor Financing Collections from Customers Excess (Deficiency) of Available Cash Over Cash Disbursements Repayments Total Available Cash Beginning Cash Balance Notes Receivable Disbursements Total Receipts Ending Cash Balance Receipts Manufacturing Overhead Cash Dividend Selling and Administrative Expenses Borrowings Sale of Securities Total Disbursements Direct Labor Direct Materials Financing Collections from Customers Manufacturing Overhead Direct Labor Direct Materials Beginning Cash Balance Notes Receivable Selling and Administrative Expenses Disbursements Ending Cash Balance Receipts Cash Dividend Excess (Deficiency) of Available Cash Over Cash Disbursements Repayments Sale of Securities Total Available Cash Total Disbursements Total Receipts Borrowings Add Less : Beginning Cash Balance Total Disbursements Borrowings Direct Materials Cash Dividend Collections from Customers Total Receipts Direct Labor Disbursements Receipts Total Available Cash Manufacturing Overhead Financing Ending Cash Balance Notes Receivable Excess (Deficiency) of Available Cash Over Cash Disbursements Repayments Sale of Securities Selling and Administrative Expenses Add Less : Repayments Cash Dividend Disbursements Beginning Cash Balance Notes Receivable Total Available Cash Sale of Securities Borrowings Financing Direct Labor Receipts Selling and Administrative Expenses Direct Materials Collections from Customers Ending Cash Balance Manufacturing Overhead Excess (Deficiency) of Available Cash Over Cash Disbursements Total Disbursements Total Receipts Disbursements Collections from Customers Sale of Securities Ending Cash Balance Direct Labor Repayments Direct Materials Total Receipts Excess (Deficiency) of Available Cash Over Cash Disbursements Financing Manufacturing Overhead Notes Receivable Beginning Cash Balance Selling and Administrative Expenses Receipts Total Available Cash Cash Dividend Total Disbursements Borrowings $ $