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Sandhill Company expects to have a cash balance of $69,000 on January 1, 2020. These are the relevant monthly budget data for the first two

Sandhill Company expects to have a cash balance of $69,000 on January 1, 2020. These are the relevant monthly budget data for the first two months of 2020.

1.

Collections from customers: January $106,500, February $219,000.

2.

Payments to suppliers: January $60,000, February $112,500.

3.

Wages: January $45,000, February $60,000. Wages are paid in the month they are incurred.

4.

Administrative expenses: January $31,500, February $36,000. These costs include depreciation of $1,500 per month. All other costs are paid as incurred.

5.

Selling expenses: January $22,500, February $30,000. These costs are exclusive of depreciation. They are paid as incurred.

6.

Sales of short-term investments in January are expected to realize $18,000 in cash. Sandhill Company has a line of credit at a local bank that enables it to borrow up to $37,500. The.company wants to maintain a minimum monthly cash balance of $30,000.

Prepare a cash budget for January and February. Show all your work for partial credits in your uploaded file. List items that increase cash balance first.

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