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Sunland Company prepares monthly cash budgets. Relevant data from operating budgets for 2022 are as follows. January February Sales $338,400 $376,000 112,800 117,500 84,600 94,000
Sunland Company prepares monthly cash budgets. Relevant data from operating budgets for 2022 are as follows. January February Sales $338,400 $376,000 112,800 117,500 84,600 94,000 Direct materials purchases Direct labor Manufacturing overhead Selling and administrative expenses 65,800 70,500 74,260 79,900 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 $940 of depreciation per month. Other data: 1. 2. 3. Credit sales: November 2021, $235,000; December 2021. $300,800. Purchases of direct materials: December 2021, $94,000. Other receipts: January-Collection of December 31, 2021, notes receivable $14,100; FebruaryProceeds from sale of securities $5,640. Other disbursements: February-Payment of $5,640 cash dividend. 4. The company's cash balance on January 1, 2022, is expected to be $56,400. The company wants to maintain a minimum cash balance of $47,000. Prepare schedules for (1) expected collections from customers and (2) expected payments for direct materials purchases for January and February SUNLAND COMPANY Schedule of Expected Collections from Customers For the Two Months Ending February 28, 2022 January February November $ 47.000 $ $ 0 December 90.240 60,160 January 169,200 101,520 February 0 188,000 Total collections 306.440 349,680 SUNLANDCOMPANY Schedule of Expected Payments for Direct Materials For the Two Months Ending February 28, 2022 January February December 37,600 $ $ 0 January 67.680 45.120 February 0 70.500 Total payments 105,280 TA 115.620 e Textbook and Media Attempts: unlimited SUNLAND COMPANY Cash Budget For the Two Months Ending February 28, 2022 January Fi Beginning Cash Balance 56400 $ Add Receipts Collections from Customers 306440 Notes Receivable
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