Sheffield Company prepares monthly cash budgets. Relevant data from operating budgets for $2023$ are as follows:

All sales are on account. Sheffield expects collections to be $50\%$ in the month of sale, $40\%$ in the first 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:

Credit sales: November $2022,$ $$198,000$; December $2022,$ $$282,000$

Purchases of direct materials: December $2022,$$$91,000$

Other receipts: January$-$collection of December $31,2022,$ notes receivable $$5,000$; February$-$proceeds from sale of securitiesOther receipts: January$-$collection of December $31,2022,$ notes receivable $$5,000$; February$-$proceeds from sale of securitie

$$6,000$

Other disbursements: February$-$payment of $$20,000$ for land

The company expects its cash balance on January $1,2023,$ to be $$50,000.$ It wants to maintain a minimum cash balance $$40,000.$

Prepare schedules for

$(1)$ the expected collections from customers.$(2)$ the expected payments for direct materials purchases.

Month

January

February

December

$

$

January

February

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Question Part Score

Prepare a cash budget for January and February using columns for each month.Prepare a cash budget for January and February using columns for each month.

LORCH COMPANY

Cash Budget

For the Two Months Ending February $28,2023$

Jan

Feb

$