Home / Questions / Colter Company prepares monthly cash budgets Relevant data from operating budgets for 201...
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.
Instructions
(a) January: collections $326,000 payments $112,000
(b) Ending cash balance: January $51,000 February $50,000
(a) Prepare schedules for (1) expected collections from customers and (2) expected payments for direct materials purchases for January and February.
(b) Prepare a cash budget for January and February in columnar form.
Prepare purchases and income statement budgets for a merchandiser.
Apr 04 2020 View more View Less
Assume that the following phrases appear within sentences in business messages. Write the preferred forms in the spaces provided.visited the Empire State Building at 350 ...
Jul 20 2021Shuggy Otis, an executive at Slapfish Corp. (SC) intends to retire in 11 years. SC just announced that it will start depositing $500.00 at the end of each quarter into ea...
Apr 20 2021Describe the relationship between the rise in the concentration of atmospheric carbon dioxide and the enhanced greenhouse effect.
Jul 20 2021What is the standard entropy change for the formation of 1 mol of the following compound from the elements at 25°C.
Jun 24 2021A nation determines its economy is slowing down. Discuss what steps its leadership might take to improve its economic growth.
Jul 07 2021Digital Books, LLC is a company that sells e-books related to career advising and professional development. Digital Books, LLC earns a yearly positive economic profit of ...
Jun 01 2020HOMEWORK CHAPTER 91. A producer is hiring 20 units of labor and 6 units of capital (bundle A). The price of labor is $10, the price of capital is $2, and at A, the ma...
Apr 27 2020Use proofreading marks to correct any capitalization errors in these sentences. Indicate the total number of changes at the right.Howard Schultz, american businessman and...
Jul 20 2021Compare the three subatomic particles in terms of 1)mass
Jul 21 2021A water pipe bursts, flooding a Metal Fabrication Company utility room and tripping the circuit breakers on a panel in the room. Metal Fabrication contacts Nouri, a licen...
Jul 06 2021