Danner Company expects to have a cash balance of $50,232 on January 1, 2014. Rel

Question

Danner Company expects to have a cash balance of $50,232 on January 1, 2014. Relevant monthly budget data for the first Collections from customers: January $92,820, February $163,800. Payments for direct materials: January $54,600, February $76,440. Direct labor: January $32,760, February $49,140. Wages are paid in the month they are incurred. Manufacturing overhead: January $22,932, February $27,300. These costs include depreciation of $1,092 per month. All oth Selling and administrative expenses: January $16,380, February $21,840. These costs are exclusive of depreciation. They are Sales of marketable securities in January are expected to realize $10,920 in cash. Danner Company has a line of credit at a lo Prepare a cash budget for January and February. DANNER COMPANY Cash Budget For the Two Months Ending February 28, 2014

Explanation / Answer

Jan Feb Beginning cash balance[A] 50232 28392 Cash receipts COllection from customers 92820 163800 sale of marketable securities 10920 Total receipts during the month [B] 103740 163800 Total cash available        C= [A+B] 153972 192192 Less:cash disbursement Direct material 54600 76440 Direct labor 32760 49140 overhead 21840     [22932-1092] 26208 selling and adm. 16380 21840 Total disbursement   [D] 125580 173628 excess of cash available for disbursement    [C-D] 28392 18564 Financing Borrowing 3276    [21840-18564] Repayment Balance at end 28392 21840

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