Question

Danner Company expects to have a cash balance of $46,035 on January 1, 2017. Relevant monthly budget data for the first 2 months of 2017 are as follows:

Collections from customers: January $86,955, February $153,450.

Payments for direct materials: January $51,150, February $76,725.

Direct labor: January $30,690, February $46,035. Wages are paid in the month they are incurred.

Manufacturing overhead: January $21,483, February $25,575. These costs include depreciation of $1,535 per month. All other overhead costs are paid as incurred.

Selling and administrative expenses: January $15,345, February $20,460. These costs are exclusive of depreciation. They are paid as incurred.

Sales of marketable securities in January are expected to realize $12,276 in cash. Danner Company has a line of credit at a local bank that enables it to borrow up to $25,575. The company wants to maintain a minimum monthly cash balance of $20,460.

Prepare a cash budget for January and February. (Do not leave any answer field blank. Enter "0" for amounts.)


DANNER COMPANY Cash Budget January February

Answer 1

Answer

Danner Company
Cash Budget
For the two months ending Feb 28, 2017
	January	february
Beginning Cash balance	$46,035	$28,133
Add: receipts
Collection from customers	$86,955	$153,450
Sales of marketable securities	$12,276	$0
Total receipts	$99,231	$153,450
Total available Cash	$145,266	$181,583
Less: disbursements
Direct materials	$51,150	$76,725
Direct labor	$30,690	$46,035
Manufacturing overhead	$19,948	$24,040
Selling & Admin expenses	$15,345	$20,460
Total disbursements	$117,133	$167,260
Excess (Deficiency) of available Cash over Cash disbursements	$28,133	$14,323
Financing
Add: Borrowrings	$0	$6,137
Less: repayments	$0	$0
Ending Cash balance	$28,133	$20,460