Colter Company prepares monthly cash budgets. Relevant data from operating budge
ID: 2465615 • Letter: C
Question
Colter Company prepares monthly cash budgets. Relevant data from operating budgets for 2013 are:
January
February
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 $1,124 of depreciation per month.
Other data:
The company’s cash balance on January 1, 2013, is expected to be $67,440. The company wants to maintain a minimum cash balance of $56,200.
January
February
Sales $393,400 $449,600 Direct materials purchases 123,640 146,120 Direct labor 101,160 112,400 Manufacturing overhead 78,680 84,300 Selling and administrative expenses 88,796 96,664 Complete the cash budget for January and February in columnar form. (List multiple entries from largest to smallest amounts, e.g. 10, 5, 1 for the January amounts.) COLTER COMPANY Cash Budget For the Two Months Ending February 28, 2013 January February Beginning cash balance Add: Receipts Collections from customers Notes receivable Sale of securities Total receipts Total available cash Less: Disbursements Direct materials Direct labor Selling and administrative expensesExplanation / Answer
Solution.
2.
Expected collection from coustomers Particular January February Novenber 58,448 December 107,904 71,936 january 196,700 118,020 Februrary 224,800 Total 363,052 414,756