Question

Danner Company expects to have a cash balance of $45,450 on January 1, 2020. Relevant monthly budget data for the first 2 months of 2020 are as follows. Collections from customers: January $85,850, February $151,500. Payments for direct materials: January $50,500, February $75,750. Direct labor: January $30,300, February $45,450. Wages are paid in the month they are incurred. Manufacturing overhead: January $21,210, February $25,250. These costs include depreciation of $1,515 per month. All other overhead costs are paid as incurred. Selling and administrative expenses: January $15,150, February $20,200. These costs are exclusive of depreciation. They are paid as incurred. Sales of marketable securities in January are expected to realize $12,120 in cash. Danner Company has a line of credit at a local bank that enables it to borrow up to $25,250. The company wants to maintain a minimum monthly cash balance of $20,200. Prepare a cash budget for January and February. DANNER COMPANY Cash Budget For the Two Months Ending February 28, 2020 V January February Beginning Cash Balance 45,450 Add . Receipts Collections from Customers 85,850 151,500 Sale of Marketable Securities 12,120 Total Receipts 97,970 151,500 Total Available Cash 143,420
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Answer 1

Danner Company
Cash Budget
For January and February
Particulars	January	February
Beginning cash balance	$45,450.00	$27,775.00
Cash Receipts:
Collection from customers	$85,850.00	$151,500.00
Sales of marketable securities	$12,120.00	$0.00
Total cash available	$143,420.00	$179,275.00
Cash disbursements:
Payment for direct material	$50,500.00	$75,750.00
Direct labor	$30,300.00	$45,450.00
Manufacturing overhead	$19,695.00	$23,735.00
Selling and administrative expenses	$15,150.00	$20,200.00
Total Cash disbursements	$115,645.00	$165,135.00
Excess of cash available over disbursements	$27,775.00	$14,140.00
Borrowings (Repayments)	$0.00	$6,060.00
Ending cash balance	$27,775.00	$20,200.00