Problem 9-4A (Part Level Submission) January February Warning Don\'t show me thi

Question

Problem 9-4A (Part Level Submission)

January

February

Warning

Don't show me this message again for the assignment

Ok

Cancel

(a)

Expected Collections from Customers

January

February

Expected Payments for Direct Materials

January

February

Warning

Don't show me this message again for the assignment

Ok

Cancel

Show Answer

Link to Text

(b)

Prepare a cash budget for January and February in columnar form

Problem 9-4A (Part Level Submission)

Colter Company prepares monthly cash budgets. Relevant data from operating budgets for 2017 are as follows:

January

February

Sales $360,000 $400,000 Direct materials purchases 120,000 125,000 Direct labor 90,000 100,000 Manufacturing overhead 70,000 75,000 Selling and administrative expenses 79,000 85,000
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 $1,000 of depreciation per month.

Other data:
1. Credit sales: November 2016, $250,000; December 2016, $320,000. 2. Purchases of direct materials: December 2016, $100,000. 3. Other receipts: January—Collection of December 31, 2016, notes receivable $15,000; February—Proceeds from sale of securities $6,000. 4. Other disbursements: February—Payment of $6,000 cash dividend.
The company’s cash balance on January 1, 2017, is expected to be $60,000. The company wants to maintain a minimum cash balance of $50,000.

Warning

Don't show me this message again for the assignment

Ok

Cancel

Explanation / Answer

CASH BUDGET

Expected Collection January February For November Sales $50,000.00 For December Sales $96,000.00 $64,000.00 For January Sales $180,000.00 $108,000.00 For Feburuary Sale $200,000.00 Total Cash Collection $326,000.00 $372,000.00

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.