Exercise 23-14 Your answer is partially correct. Try again. Danner Company expec
ID: 2582274 • Letter: E
Question
Exercise 23-14 Your answer is partially correct. Try again. Danner Company expects to have a cash balance of $55,620 on January 1, 2017. Relevant monthly budget data for the first 2 months of 2017 are as follows: Collections from customers: January $105,060, February $185,400. Payments for direct materials: January $61,800, February $92,700 Direct labor:January 37,080, February $55,620, wages are paid in the month they are incurred Manufacturing overhead: January $25,956, February $30,900. These costs include depreciation of $1,854 per month. All other overhead costs are paid as incurred Selling and administrative expenses:January $18,540, February $24,720. These costs are exclusive of depreciation. They are paid as incurred Sales of marketable securities in January are expected to realize $14,832 in cash. Danner Company has a line of credit at a local bank that enables it to borrow up to $30,900 The company wants to maintain a minimum monthly cash balance of $24,720Explanation / Answer
ans)
DANNER COMPANY
Cash budget
for the two months ending feb, 28, 2017
January Febrauary
Beginning cash balance 55620 33990
Add: Receipts
Collections from customers 105060 185400
Sale of markateable securities 14832 ----
Total receipts 119892 185400
Total available cash 175512 219390
Less: Disbursements
Payments to suppliers 61800 92700
wages 37080 55620
Manufacturing overhead 24102 29046
(25956 -1854)
Selling and administrative expenses 18540 24720
Total disbursements 141522 202086
Excess of available cash over disbursements 33990 17304
Financing:
Borrowings --- 7416 (24720 -17304)
Repayments ---
Ending cash balance 33990 24720
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