Colter Company prepares monthly cash budgets. Relevant data from operating budge

Question

Colter Company prepares monthly cash budgets. Relevant data from operating budgets for 2014 are: 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 $1,047 of depreciation per month. Other data: The company's cash balance on January 1, 2014, is expected to be $62,820. The company wants to maintain a minimum cash balance of $52,350. Prepare schedules for (1) expected collections from customers and expected payments for direct materials purchases.

Explanation / Answer

Colter Company prepares monthly cash budgets. Relevant data from operating budge

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