Waterways Corporation is preparing its budget for the coming year, 2020. The first step is to plan for the first quarter of that coming year. The company has gathered information from its managers in preparation of the budgeting process.

Sales
Unit sales for November 2019		112,000
Unit sales for December 2019		103,000
Expected unit sales for January 2020		114,000
Expected unit sales for February 2020		113,000
Expected unit sales for March 2020		116,000
Expected unit sales for April 2020		124,000
Expected unit sales for May 2020		138,000
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, 2019, totaled $185,400. Direct Materials Direct materials cost 80 cents per pound. Two pounds of direct materials are required to produce each unit. Waterways likes to keep 5% of the materials needed for the next month in its ending inventory. Raw Materials on December 31, 2019, totaled 11,390 pounds. 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, 2019, totaled $104,590.

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		50		per labor hour
Maintenance		30		per labor hour
Salaries		$43,000		per month
Depreciation		$16,600		per month
Property taxes		$2,700		per month
Insurance		$1,300		per month
Maintenance		$1,200		per month

Selling and Administrative
Variable selling and administrative cost per unit is $1.50.
Advertising		$14,000	a month
Insurance		$1,400	a month
Salaries		$72,000	a month
Depreciation		$2,600	a month
Other fixed costs		$3,000	a month

Other Information The Cash balance on December 31, 2019, totaled $103,000, but management has decided it would like to maintain a cash balance of at least $800,000 beginning on January 31, 2020. Dividends are paid each month at the rate of $2.40 per share for 4,540 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 $460,000 equipment purchase is planned for February.

For the first quarter of 2020, prepare a cash budget. (Round answers to 0 decimal places, e.g. 2,520.)

For the first quarter of 2020, prepare a schedule for expected cash collections from customers. Schedule of Expected Collections from Customers February March January Quarter Accounts receivable, 12/31/19 $ $ $ January sales February sales March sales Total cash collections $ $ $ $ For the first quarter of 2020, prepare a schedule for expected payments for materials purchases. (Round answers to 0 decimal places, e.g. 2,520.) Schedule of Expected Cash Payments for Purchases January February March Quarter Accounts payable 12/31/19 $ $ $ $ January February March Total payments $ WATERWAYS CORPORATION Cash Budget For the First Quarter of 2020 First Quarter January February March Quarter Beginning Cash Balance S Add Receipts Collections From Customers Total Available Cash Less Disbursements Direct Labor Direct Materials Dividends Equipment Purchase Manufacturing Overhead Selling And Administrative Total Disbursements Excess (Deficiency) Of Available Cash Over Cash Disbursements Financing Add Borrowings Less Interest Repayments Ending Cash Balance