QUESTION 2

Sheridan Company expects to have a cash balance of $134,100 on January 1,2020 . Relevant monthly budget data for the first 2 months of 2020 are as follows: - Collections from customers: January $250,000, February $427,300. - Payments for direct materials: January $155,500, February $234,400 - Direct labor: January $91,600, February $133,900. Wages are paid in the month they are incurred. - Manufacturing overhead: January $63,500, February $73,900. These costs include depreciation of $5,000 per month. All other overhead costs are paid as incurred. - Selling and administrative expenses: January $45,000, February $60,100. These costs are exclusive of depreciation. They are paid as incurred. - Sales of marketable securities in January are expected to realize $36,000 in cash. Sheridan Company has a line of credit at the local bank that enables it to borrow up to $75,600. The company wants to maintain a minimum monthly cash balance of $58,800. Prepare a cash budget for January and February. (Do not leave any answer field blank. Enter 0 for amounts.)