Business, 04.04.2020 14:50 terryg4397
Colter Company prepares monthly cash budgets. Relevant data fromoperating budgets for 2017 are as follows:
January February
Sales 360,000 $400,000
Direct materials purchases 120,000 125,000
Direct labor 90,000 100,000
Manufacturing overhead 70,000 75,000
Selling and administrative expenses 79,000 85,000
All sales are on account. Collections are expected to be 50% inthe month of sale, 30% in the first month following the sale, and20% in the second month following the sale. Sixty percent (60%) ofdirect materials purchases are paid in cash in the month ofpurchase, and the balance due is paid in the month following thepurchase. All other items above are paid in the month incurredexcept for selling and administrative expenses that include $1,000of depreciation per month.
Other data:
1. Credit sales: November 2016, $250,000; December 2016,$320,000.
2. Purchases of direct materials: December 2016, $100,000.
3. Other receipts: January Collection of December 31, 2016,notes receivable $15,000; FebruaryâProceeds from sale of securities $6,000.
4. Other disbursements: February Payment of $6,000 cashdividend.
The companys cash balance on January 1, 2017, is expected to be $60,000. The company wants to maintain a minimum cash balance of $50,000.
Prepare schedules for (1) expected collections from customersand (2) expected payments for direct materials purchases forJanuary and February.
Prepare a cash budget for January and February in columnarform.
Answers: 2
Business, 22.06.2019 07:10
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Colter Company prepares monthly cash budgets. Relevant data fromoperating budgets for 2017 are as fo...
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