Blue Spruce Corp. prepares monthly cash budgets. Here are relevant data from operating budgets for 2017.
Sales $360,700 $401,100
Purchases 121,500 131,400
Salaries 84,600 81,000
Administrative expenses 71,000 73,700
Selling expenses 79,000 86,900
All sales and purchases are on account. Budgeted collections and disbursement data are given below. All other expenses are paid in the month incurred except for administrative expenses, which include $1,200 of depreciation per month.
1. Collections from customers: January $328,100;February $378,200.
2. Payments for purchases: January $111,400;
3. Other receipts: January: collection of December 31, 2016, notes receivable $18,400; February: proceeds from sale of securities $5,500.
4. Other disbursements: February $13,000 cash dividend.
The company’s cash balance on January 1, 2017, is expected to be $47,400. The company wants to maintain a minimum cash balance of $45,910.
Prepare a cash budget for January and February.
|Cash Balance Beginning||47400||49100|
|Cash collection from customer||328100||378200|
|Collection from Notes receivable||18400|
|Sales of securities||5500|
|Total Available cash||393900||432800|
|Purchase of inventory||111400||144900|
|Repayments including Interest||0|
|Cash Balance, ending||49100||45910|
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