Question 3 Crane Company prepares monthly cash budgets. Relevant data from operating budgets for 2020 are as follows. Sales Direct materials purchases Direct labor Manufacturing overhead Selling and administrative expenses January $446,400 148,800 111,600 86,800 97,960 February $496,000 155,000 124,000 93,000 105,400 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 $1,240 of depreciation per month. Other data: 1. 2. 3. Credit sales: November 2019, $310,000; December 2019, $396,800. Purchases of direct materials: December 2019, $124,000. Other receipts: January-Collection of December 31, 2019, notes receivable $18,600; February-Proceeds from sale of securities $7,440. Other disbursements: February-Payment of $7,440 cash dividend. 4. The company's cash balance on January 1, 2020, is expected to be $74,400. The company wants to maintain a minimum cash balance of $62,000. 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 Prepare a cash budget for January and February in columnar form. CRANE COMPANY Cash Budget January February Click if you would like to Show Work for this question: Open Show Work