Exercise 21-14 Your answer is partially correct. Try again. Danner Company expec

Question

Exercise 21-14 Your answer is partially correct. Try again. Danner Company expects to have a cash balance of $59,355 on January 1, 2017. Relevant monthly budget data for the first 2 months of 2017 are as follows. Collections from customers: January $112,115, February $197,850 Payments for direct materials: January S65,950, February s93,925 Direct labor: January $39,570, February s59,355. Wages are paid in the month they are incurred Manufacturing overhead: January s27,699, February s32,975. These costs include depreciation of S1,978 per month. All other overhead costs are paid as incurred. Selling and administrative expenses: January S19,785, February S26,380. These costs are exclusive of depreciation. They are paid as incurred. Sales of marketable securities in January are expected to realize $15,323 in cash. Danner Company has a line of credit at a local bank that enables it to bomow up to 532,975. The company wants to maintain a minimum monthly cash balance of $26,380 Prepare a cash budget for January and February. (Do not leave any answer field bfank, Enter 0 for amounts.) DANNER COMPANY Cash Budget For the Two Months Ending February 28, 2017 Janua Februa inning Cash Balan 9355 627 Sale of Marketable Securitie 112115 197850 ollections from Custome 15028 Total Recei 27943 97850 otal Available Cas 8729 34122 isbursements anufacturing Overhead 55950 98925 irect Material 39570 59355 Direct La 25721 30997 638 15657 8465 Selling and Administrative Expenses 9785 51026 6272 otal Disbursements Excess (Defici of Available Cash r Cash Disbursements inancin 7915 epayment nding Cash Balanc 627 $2638

Explanation / Answer

Danner company January Feburary Beginning cash balance 59,355 36,272 Add:Receipts Sale of Marketable securities 15,828 0 collections from customers 112,115 197,850 total receipts 127,943 197,850 total cash available 187,298 234,122 less:disbursements manufacturing overhead 25721 30997 Direct materials 65,950 98,925 Direct labor 39,570 59,355 selling and administrative expense 19,785 26,380 total Disbursements 151026 215657 Excess(Deficiency)of Available cash over disbursement 36,272 18,465 financing: Add:Borrowings 0 7,915 less:Repayments 0 0 ending cash balance 36,272 26,380

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