Hi, I need help to answer this problem.!!!!!!!!!!!!! Colter Company prepares mon

Question

Hi, I need help to answer this problem.!!!!!!!!!!!!!

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

January

February

(a)

Expected Collections from Customers

January

February

Expected Payments for Direct Materials

January

February

Hi, I need help to answer this problem.!!!!!!!!!!!!!

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

January

February

Sales $379,400 $433,600 Direct materials purchases 119,240 140,920 Direct labor 97,560 108,400 Manufacturing overhead 75,880 81,300 Selling and administrative expenses 85,636 93,224
All sales are on account. Collections are expected to be 50% in the month of sale, 30% in the first month following the sale, and 20% 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 $1,084 of depreciation per month.

Other data:
1. Credit sales: November 2013, $281,840; December 2013, $346,880. 2. Purchases of direct materials: December 2013, $108,400. 3. Other receipts: January—Collection of December 31, 2013, notes receivable $16,260;                       February—Proceeds from sale of securities $6,504. 4. Other disbursements: February—Payment of $5,420 cash dividend.
The company’s cash balance on January 1, 2014, is expected to be $65,040. The company wants to maintain a minimum cash balance of $54,200.

Explanation / Answer

Ans 1 Collections from Customers January Feb November 20% 56368 December 30% and 20% respectively 104064 69376 January 50% and 30% respectively 189700 113820 February 216800 Total collections 350132 399996 50% in same month 30% in next month and 20% in following month Expected Payments for Direct Materials January February December 40% 43360 January 60% and 40% respectively 71544 47696 February 84552     Total payments 114904 132248

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