Problem 23-4A Colter Company prepares monthly cash budgets. Relevant data from o

Question

Problem 23-4A Colter Company prepares monthly cash budgets. Relevant data from operating budgets for 2017 are as follows: Sales Direct materials purchases Direct labor Manufacturing overhead Selling and administrative expenses $370,800 123,600 92,700 72,100 81,370 $412,000 128,750 103,000 77,250 87,550 All sales are on account. Collections are expected to be 50% in the month of sale, 30% in the rst month ollowing he sale, and 20% in the second month ollowing the sale. Sixty percent 60% o direct materials purchases are paid in cash in the month o 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 $1,030 of depreciation per month. Other data: 1. 2. 3. Credit sales: November 2016, $257,500; December 2016, $329,600 Purchases of direct materials: December 2016, 103,000 Other receipts: January-Collection of December 31, 2016, notes receivable $15,450; February-Proceeds from sale of securities $6,180 4. Other disbursements: February-Payment of $6,180 cash dividend. The company's cash balance on January 1, 2017, is expected to be $61,800. The company wants to maintain a minimum cash balance of $51,500 Prepare schedules for (1) expected collections from customers and (2) expected payments for direct materials purchases for January and February Expected Collections from Customers Janua Febr December anuary February Total collections Expected Payments for Direct Materials Janu Februa December January February Total payments $ LINK TO TEXT

Explanation / Answer

Expected Cash Collection January February November 257500*.20 51500 December 329600*.30   , 329600*.20 98880 65920 January      370800*.50 .370800*.30 185400 111240 February 412000*.50 206000 Total Collection 335780 383160 Expected Payment For Direct Material January February December 103000*.40 41200 January 123600*.60 , 123600*.40 74160 49440 February 128750*.60 77250 115360 126690 Cash Budget January February Beginning cash balance 61800 52530 Add: Receipts Collections from customers 335780 383160 Notes receivable 15450 0 Sale of securities 0 6180 Total receipts 351230 389340 Total available cash 413030 441870 Less: Disbursements Direct materials 115360 126690 Direct labor 92700 103000 Manufacturing overhead 72100 77250 Selling and administrative Less Depreciation 80340 86520 Dividend 6180 Total disbursements 360500 399640 Excess (deficiency) of available cash over cash disbursement 52530 42230 Financing Borrowings 0 9270 Repayments 0 Ending cash balance 52530 51500

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