Waterways Corporation is preparing its budget for the coming year, 2022. The first step is to plan for the first quarter of that coming year. Waterways gathered the following information from the managers.

Sales
Unit sales for November 2021		112,000
Unit sales for December 2021		102,000
Expected unit sales for January 2022		113,000
Expected unit sales for February 2022		112,000
Expected unit sales for March 2022		115,000
Expected unit sales for April 2022		125,000
Expected unit sales for May 2022		136,000
Unit selling price		$12

Waterways likes to keep 10% of the next months unit sales in ending inventory. All sales are on account. 85% of the Accounts Receivable are collected in the month of sale, and 15% of the Accounts Receivable are collected in the month after sale. Accounts receivable on December 31, 2021, totaled $183,600.

Direct Materials
Item		Amount Used per Unit		Inventory, Dec. 31
Metal		1 lb @ 58 per lb.		5,177.5 lbs
Plastic		12 oz @ 6 per oz		3,883.125 lbs
Rubber		4 oz @ 5 per oz		1,294.375 lbs
		2 lbs per unit		10,355.0 lbs

Metal, plastic, and rubber together are 80 per pound per unit. Waterways likes to keep 5% of the materials needed for the next month in its ending inventory. Payment for materials is made within 15 days. 50% is paid in the month of purchase, and 50% is paid in the month after purchase. Accounts Payable on December 31, 2021, totaled $103,590. Raw Materials on December 31, 2021, totaled 11,290 pounds.

Direct Labor

Labor requires 12 minutes per unit for completion and is paid at a rate of $9 per hour.

Manufacturing Overhead
Indirect materials		30		per labor hour
Indirect labor		50		per labor hour
Utilities		40		per labor hour
Maintenance		30		per labor hour
Salaries		$42,000		per month
Depreciation		$16,200		per month
Property taxes		$2,400		per month
Insurance		$1,300		per month
Maintenance		$1,400		per month

Selling and Administrative
Variable selling and administrative cost per unit is $1.50.
Advertising		$17,000	a month
Insurance		$1,600	a month
Salaries		$71,000	a month
Depreciation		$2,700	a month
Other fixed costs		$2,900	a month

Other Information The Cash balance on December 31, 2021, totaled $101,000, but management has decided it would like to maintain a cash balance of at least $700,000 beginning on January 31, 2022. Dividends are paid each month at the rate of $2.30 per share for 5,080 shares outstanding. The company has an open line of credit with Romneys Bank. The terms of the agreement requires borrowing to be in $1,000 increments at 9% interest. Waterways borrows on the first day of the month and repays on the last day of the month. A $530,000 equipment purchase is planned for February.

WATERWAYS CORPORATION Cash Budget

	jan	feb	march	quarter
Beginning Cash balance
Add: Receipts
Collections from customers
(Total Avallable Cash
Less: Disbursements
Direct Materials
Direct Labor
Manufacturing Overhead
Selling and Administrative
Dividends
Equipment Purchase
Total Disbursements
Excess (Deficiency )of Available Cash
over Cash disbursements
Financing
Add: Borrowings
Less: Repayments
Interest

Ending Cash balance