Villalobos Company has $$12,500$ in cash on hand on January $1$ and has collected the following budget data:

View the budget data.

Assume direct labor costs and manufacturing overhead costs are paid in the month incurred. Additionally, assume Villalobos Company has cash payments for selling and administrative expenses including salaries of $$50,000$ per month plus commissions that are $1\%$ of sales, all paid in the month of sale. The company requires a minimum cash balance of $$10,000.$ Prepare a cash budget for January and February. Round to the nearest dollar. Will Villalobos Company need to borrow cash by the end of February?

$\backslash$table$[[$Villalobos Company$],[$Cash Budget$],[$Beginning cash balance$],[$Cash receipts$],[$Cash available$],[$Cash payments:$],[$Purchases of direct materials$],[$Direct labor$],[$Manufacturing overhead$],[$Selling and administrative expenses$],[$Total cash payments$],[$Ending cash balance before financing$],[$Minimum cash balance desired$],[$Projected cash excess $($deficiency$)],[$Financing:$],[$Borrowing$],[$Principal repayments$],[$Total effects of financing$],[$Ending cash balance$]]$

Budget Data

$\backslash$table$[[,$January,February$],[$Sales$,262,500,$$$06,250$

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