Question 1

Crane Company expects to have a cash balance of $47,700 on January 1, 2022. Relevant monthly budget data for the rst 2 months of 2022 are as follows. Collections from customers: January $90,100, February $159,000. Payments for direct materials: January $53,000, February $79,500. Direct labor: January $31,800, February $47,700. Wages are paid in the month they are incurred. Manufacturing overhead: January $22,260, February $26,500. These costs include depreciation of $1,590 per month. All other overhead costs are paid as incurred. Selling and administrative expenses: January $15,900, February $21,200. These costs are exclusive of depreciation. They are paid as incurred. Sales of marketable securities in January are expected to realize $12,720 in cash. Crane Company has a line of credit at a local bank that enables it to borrow up to $26,500. The company wants to maintain a minimum monthly cash balance of $21,200. Prepare a cash budget for January and February. Marigold Company's budgeted sales and direct materials purchases are as follows. Bu:j::Ed Budgeted D.M. Purchases January 35 168,000 $25,200 February 184,800 30,240 March 210,000 31,920 Marigold's sales are 30% cash and 70% credit. Credit sales are collected 10% in the month of sale, 50% in the month following sale, and 36% in the second month following sale; 4% are uncollectible. Marigold's purchases are 50% cash and 50% on account. Purchases on account are paid 40% in the month of purchase, and 60% in the month following purchase. (3) Prepare a schedule of expected collections from customers for March. LILY COMPANY Schedule of Expected Collections from Customers March Total collections $ (13) Prepare a schedule of expected payments for direct materials for March. LILY COMPANY Schedule of Expected Payments for Direct Materials March Total payments $ Bramble Company prepares monthly cash budgets. Relevant data from operating budgets for 2022 are as follows. January February Sales $345,600 $384,000 Direct materials purchases 115,200 120,000 Direct labor 86,400 96,000 Manufacturing overhead 67,200 72,000 Selling and administrative expenses 75,840 81,600 All sales are on account. Collections are expected to be 50% in the month of sale, 30% in the rst 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 $960 of depreciation per month. Other data: 1. Credit sales: November 2021, $240,000; December 2021, $307,200. 2. Purchases of direct materials: December 2021, $96,000. 3. Other receipts: JanuaryCollection of December 31, 2021, notes receivable $14,400; Februaryi Proceeds from sale of securities $5,760. 4. Other disbursements: Februaryi Payment of $5,760 cash dividend. The company's cash balance on January 1, 2022, is expected to be $57,600. The company wants to maintain a minimum cash balance of $48,000. Prepare schedules for (1) expected collections from customers and (2) expected payments for direct materials purchases for January and February. BRAMBLE COMPANY Schedule of Expected Collections from Customers January February November $ $ December January February $ Total collections to BRAMBLECOMPANY Schedule of Expected Payments for Direct Materials January February to December January February Total payments $Prepare a cash budget for January and February in columnar form. BRAMBLE COMPANY Cash Budget V January February $ $ V V V