Requirement 2. Prepare a combined cash budget for January and February. If no financing activity takes place, what is the budgeted cash balance on February 28?

Sales are 70% cash and 30% credit. Credit sales are collected 10% in the month of sale and the remainder in the month after sale. Actual sales in December were $56,000. Schedules of budgeted sales for the two months of the upcoming year are as follows: a. Budgeted Sales Revenue $62,000 $71,000 Actual purchases of direct materials in December were $23,000. The company's purchases of direct materials in January are budgeted to be $22,000 and $25,000 in February. All purchases are paid 30% in the month of purchase and 70% the following month. Salaries and sales commissions are also paid half in the month earned and half the next month. Actual salaries were $8,500 in December. Budgeted salaries in January are $9,500 and February budgeted salaries are $11,000. Sales commissions each month are 10% of that month's sales. Rent expense is $3,100 per month. Depreciation is $2,300 per month. Estimated income tax payments are made at the end of January. The estimated tax payment is projected to be $13,500. The cash balance at the end of the prior year was $24,000 b. c. d. e. f. g. Hunter's Restaurant Supply Combined Cash Budget For the Months Ended January 31 and February 28 January February 2 months Beginning cash balance Plus: Cash collections from customers Total cash available Less cash payments 60,380 68,570 128,950 (22,700) (31,500) (22,900) (20,000) (45,600) (51,500) Direct materials purchases Operating expenses Total cash payments Ending cash balance