Your answer is partially correct. Try again Danner Company expects to have a cas

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Your answer is partially correct. Try again Danner Company expects to have a cash balance of $59,478 on January 1, 2014. Relevant monthly budget data for the first 2 months of 2014 are as follows. Collections from customers: January $109,905, February $193,950 Payments for direct materials: January $64,650, February $90,510 Direct labor: January $38,790, February $58,185. Wages are paid in the month they are incurred Manufacturing overhead: January $27,153, February $32,325. These costs include depreciation of $1,293 per month. All other overhead costs are paid as incurred Selling and administrative expenses: January $19,395, February $25,860. These costs are exclusive of depreciation. They are paid as incurred. Sales of marketable securities in January are expected to realize $12,930 in cash. Danner Company has a line of credit at a local bank that enables it to borrow up to $32,325. The company wants to maintain a minimum monthly cash balance of $25,860 Prepare a cash budget for January and February

Explanation / Answer

Danner Company Cash budget For January and Febrauary 2014 January February Beginning Cash Balance $59,478 $33,618 Add: Receipts Collection from customers $109,905 $193,950 Sale of Marketable Securties $12,930 0 Total Receipts $122,835 $193,950 Total Available Cash $182,313 $227,568 Less: Disbursements Direct Materials $64,650 $90,510 Direct Labour $38,790 $58,185 Manufacturing Overhead $25,860 $31,032 Selling and administrative Expense $19,395 $25,860 Total Disbrusements $148,695 $205,587 Excess(Deficiency) of Available Cash over Cash Disbursements $33,618 $21,981 Financing Add: Borrowing 0 3879 Ending Cash Balance $33,618 $25,860

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