Question 1(20 Marks) Conestoga Corporation prepares monthly cash budgets. Relevant data from its assumed operating budget for 2016 are as follows: Sales Direct materials purchases Direct labour Manufacturing overhead Selling and administrative expenses January $460,000 185,000 70,000 50,000 85,000 February $412,000 210,000 85,000 65,000 95,000 Conestoga sells 50% of its total products directly to the customers in cash and the rest to the local stores on credit. Collections from local stores are expected to be 50% in the month of sales, and 50% in the month following sales. Conestoga pays 60% of direct materials purchases in cash in the month of purchase and pays the balance due in the month following the purchase. It pays all other items above in the month incurred. (Amortization has been excluded from manufacturing overhead and selling and administrative expenses) Other data: 1. Sales: November 2015,$370,000: December 2015, $320,000 2. Purchases of direct materials : December 2015, $175,000 3. Other receipts : January - Commission received, $2,000 February-Sale of used equipment, $3,000 4. Other disbursements: February - Purchased equipment $10,000 5. Repaid debt: January, $30,000 The company's cash balance on January1, 2016, is expected to be $ 50,000. The company wants to keep minimum cash balance of $45,000. Required: 1. Prepare schedules for (a) Expected collections from customers and (5) (b) Expected payments for direct materials purchases. 2. Prepare cash budget, with columns, for January and February (10) (5) Collection from Customers January February Totals Payments for direct materials: die menschool Totals 18100 2000W Cash Budget January February Balance Collections from customers 6) OOO 50000 Total receipts Total cash available Less: Disbursements Manufacture overhead expenses Selline e administrative Commision received 8 Jobo D 2000 + 2730 00 30000 Excess or ( Deficiency) Financing: Borrowing Repayments Ending Balance 250960