Question 30 Lorch Company prepares monthly cash budgets. Relevant data from operating budgets for 2021 are as follows: Sale $353,000 $398,000 Direct materials purchases 120,000 111,000 Direct labour 35,000 111,000 Manufactunng overhead 59,000 74,000 Selling and administrative expenses 75,000 79,000 All sales are on account. Lorch expects collections to be 50% in the month of sale, 40% In the rst month following the sale, and 10% in the second month Following the sale. It pays 30% of direct materials purchases in cash In the month of purchase and the balance due in the month following the purchase. Other data are as follows: 1. Credit sales: November 2020, $190,000; December 2020, $279,000 2. Purchases of direct materials: December 2020' $91,000 3. Other receipts: Januarycollecon of Decerriber 31, 2020, not receivable $5,000.: Februaryproceeds from sale of securities $5,000 4. Other disbursements: Februarypayment of $20,000 for land The company expects its cash balance on January 1, 2021, to be $49,000. It wants to maintain a minimum cash balance of $39,000. Prepare schedules for (1) the expected collections from customers. Month January February November December January February (2) the expected payments for direct materials purchases. Month January February December January FebruaryPrepare a cash budget for January and February using columns for each month. LORCH COMPANY Cash Budget For the Two Months Ending February 28, 2021 Jan Feb Total Beginning cash balance S Add: Cash receipts Total receipts Total available cash Less: Disbursements vTotal disbursements Excess of cash available over cash disbursements Financing: Borrowing Total financing Ending cash balanceSelling and administrative expenses Proceeds from sale of securities Direct materials Direct labour Borrowing Manufacturing overhead Purchase of land Interest expenses Repayment Collection from credit sales Collection of notes receivable