Colter company prepares monthly cash budgets relevant data

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Reference no: EM13392990

Colter Company prepares monthly cash budgets. Relevant data from operating budgets for 2014 are:

   

January

 

February

Sales

 

$349,600

   

$399,900

 

Direct materials purchases

 

110,700

   

130,700

 

Direct labor

 

89,820

   

100,610

 

Manufacturing overhead

 

69,990

   

74,910

 

Selling and administrative expenses

 

79,280

   

85,630

 

All sales are on account. Collections are expected to be 49% in the month of sale, 30% in the first month following the sale, and 21% 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 $1,400 of depreciation per month.

Other data:

1.

 

Credit sales: November 2013, $250,600; December 2013, $318,900.

2.

 

Purchases of direct materials: December 2013, $100,900.

3.

 

Other receipts: January-Collection of December 31, 2013, notes receivable $15,260; February-Proceeds from sale of securities $6,950.

4.

 

Other disbursements: February-payment of $5,110 cash dividend.

The company's cash balance on January 1, 2014, is expected to be $60,300. The company wants to maintain a minimum cash balance of $48,600.

Prepare schedules for expected collections from customers and expected payments for direct materials purchases for January and February.

Prepare a cash budget for January and February.

Reference no: EM13392990

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