Question

Question 10 --/2 View Policies Current Attempt in Progress Danner Company expects to have a cash balance of $54,900 on January 1, 2020. Relevant monthly budget data for the first 2 months of 2020 are as follows. Collections from customers: January $103,700, February $183,000. Payments for direct materials: January $61,000, February $91,500. Direct labor: January $36,600, February $54,900. Wages are paid in the month they are incurred. Manufacturing overhead: January $25,620, February $30,500. These costs include depreciation of $1,830 per month. All other overhead costs are paid as incurred. Selling and administrative expenses: January $18,300, February $24,400. These costs are exclusive of depreciation. They are paid as incurred. Sales of marketable securities in January are expected to realize $14,640 in cash. Danner Company has a line of credit at a local bank that enables it to borrow up to $30,500. The company wants to maintain a minimum monthly cash balance of $24,400. Prepare a cash budget for January and February.

Answer 1

Answer-

DANNER COMPANY
CASH BUDGET
PARTICULARS	JANUARY	FEBRUARY
	$	$
Beginning cash balance (A)	54900	33550
Add- Budgeted cash receipts
Collection from customers	103700	183000
Sale of marketable securities	14640	0
Total cash available for use (B)	173240	216550
Less- Cash Payments
Payment for direct materials	61000	91500
Direct labor	36600	54900
Manufacturing overhead excluding depreciation	23790	28670
Selling & Administrative costs excluding depreciation	18300	24400
Total cash payments (C)	139690	199470
Cash surplus/ (Deficit) (D=A+B-C)	33550	17080
Financing:-
Add-Borrowings	0	7320
Less-Repayments	0	0
Budgeted ending cash balance	33550	24400