Question

Danner Company expects to have a cash balance of $ 45,450 on January 1, 2020. Relevant monthly budget data for the first 2 months of 2020 are as follows.

Collections from customers: January $ 85,850, February $ 151,500.

Payments for direct materials: January $ 50,500, February $ 75,750.

Direct labor: January $ 30,300, February $ 45,450. Wages are paid in the month they are incurred.

Manufacturing overhead: January $ 21,210, February $ 25,250. These costs include depreciation of $ 1,515 per month. All other overhead costs are paid as incurred.

Selling and administrative expenses: January $ 15,150, February $ 20,200. These costs are exclusive of depreciation. They are paid as incurred.

Sales of marketable securities in January are expected to realize $ 12,120 in cash. Danner Company has a line of credit at a local bank that enables it to borrow up to $ 25,250. The company wants to maintain a minimum monthly cash balance of $ 20,200.

Prepare a cash budget for January and February.

DANNER COMPANY Cash Budget choose the accounting periodchoose the accounting period  For the Two Months Ending February 28, 2020February 28, 2020For the Quarter Ending February 28, 2020
		January		February
select an opening cash budget itemselect an opening cash budget item  Sale of Marketable SecuritiesDirect LaborManufacturing OverheadTotal ReceiptsFinancingRepaymentsCollections from CustomersSelling and Administrative ExpensesBorrowingsBeginning Cash BalanceTotal DisbursementsDisbursementsExcess (Deficiency) of Available Cash Over Cash DisbursementsEnding Cash BalanceReceiptsDirect MaterialsTotal Available Cash		$ enter a dollar amount		$ enter a dollar amount
select between addition and deductionselect between addition and deduction  AddLess:  select an opening name for section oneselect an opening name for section one  Collections from CustomersRepaymentsBeginning Cash BalanceBorrowingsEnding Cash BalanceSale of Marketable SecuritiesDirect LaborTotal DisbursementsManufacturing OverheadTotal Available CashFinancingExcess (Deficiency) of Available Cash Over Cash DisbursementsDisbursementsReceiptsTotal ReceiptsSelling and Administrative ExpensesDirect Materials
select a cash budget itemselect a cash budget item  FinancingEnding Cash BalanceDirect MaterialsTotal ReceiptsReceiptsDirect LaborTotal Available CashExcess (Deficiency) of Available Cash Over Cash DisbursementsBeginning Cash BalanceBorrowingsSale of Marketable SecuritiesTotal DisbursementsCollections from CustomersSelling and Administrative ExpensesRepaymentsDisbursementsManufacturing Overhead		enter a dollar amount		enter a dollar amount
select a cash budget itemselect a cash budget item  FinancingCollections from CustomersTotal Available CashBorrowingsTotal ReceiptsManufacturing OverheadSale of Marketable SecuritiesBeginning Cash BalanceReceiptsTotal DisbursementsEnding Cash BalanceRepaymentsDirect LaborDirect MaterialsExcess (Deficiency) of Available Cash Over Cash DisbursementsSelling and Administrative ExpensesDisbursements		enter a dollar amount		enter a dollar amount
select a closing name for section oneselect a closing name for section one  FinancingBorrowingsTotal DisbursementsDirect MaterialsCollections from CustomersDisbursementsEnding Cash BalanceBeginning Cash BalanceTotal ReceiptsSelling and Administrative ExpensesReceiptsSale of Marketable SecuritiesManufacturing OverheadTotal Available CashRepaymentsExcess (Deficiency) of Available Cash Over Cash DisbursementsDirect Labor		enter a total amount for section one		enter a total amount for section one
select a summarizing line for the first partselect a summarizing line for the first part  ReceiptsSale of Marketable SecuritiesSelling and Administrative ExpensesTotal Available CashFinancingTotal ReceiptsTotal DisbursementsCollections from CustomersExcess (Deficiency) of Available Cash Over Cash DisbursementsBorrowingsDirect LaborManufacturing OverheadRepaymentsBeginning Cash BalanceDisbursementsDirect MaterialsEnding Cash Balance		enter a total amount for the first part		enter a total amount for the first part
select between addition and deductionselect between addition and deduction  AddLess:  select an opening name for section twoselect an opening name for section two  RepaymentsTotal ReceiptsExcess (Deficiency) of Available Cash Over Cash DisbursementsCollections from CustomersSale of Marketable SecuritiesEnding Cash BalanceFinancingDirect MaterialsManufacturing OverheadBeginning Cash BalanceBorrowingsReceiptsSelling and Administrative ExpensesTotal Available CashDisbursementsDirect LaborTotal Disbursements
select a cash budget itemselect a cash budget item  Excess (Deficiency) of Available Cash Over Cash DisbursementsTotal Available CashDirect MaterialsBorrowingsSelling and Administrative ExpensesReceiptsCollections from CustomersRepaymentsSale of Marketable SecuritiesDisbursementsFinancingEnding Cash BalanceTotal ReceiptsDirect LaborManufacturing OverheadBeginning Cash BalanceTotal Disbursements		enter a dollar amount		enter a dollar amount
select a cash budget itemselect a cash budget item  ReceiptsDirect LaborCollections from CustomersBeginning Cash BalanceManufacturing OverheadDirect MaterialsExcess (Deficiency) of Available Cash Over Cash DisbursementsTotal DisbursementsTotal ReceiptsRepaymentsFinancingSelling and Administrative ExpensesEnding Cash BalanceDisbursementsBorrowingsTotal Available CashSale of Marketable Securities		enter a dollar amount		enter a dollar amount
select a cash budget itemselect a cash budget item  Sale of Marketable SecuritiesDisbursementsTotal Available CashTotal DisbursementsRepaymentsCollections from CustomersBeginning Cash BalanceBorrowingsManufacturing OverheadTotal ReceiptsExcess (Deficiency) of Available Cash Over Cash DisbursementsEnding Cash BalanceFinancingDirect LaborDirect MaterialsSelling and Administrative ExpensesReceipts		enter a dollar amount		enter a dollar amount
select a cash budget itemselect a cash budget item  Total ReceiptsSelling and Administrative ExpensesDisbursementsReceiptsFinancingDirect MaterialsDirect LaborEnding Cash BalanceExcess (Deficiency) of Available Cash Over Cash DisbursementsManufacturing OverheadTotal DisbursementsSale of Marketable SecuritiesTotal Available CashCollections from CustomersBeginning Cash BalanceBorrowingsRepayments		enter a dollar amount		enter a dollar amount
select a closing name for section twoselect a closing name for section two  Total ReceiptsEnding Cash BalanceTotal Available CashBeginning Cash BalanceDirect MaterialsDirect LaborBorrowingsCollections from CustomersFinancingDisbursementsRepaymentsManufacturing OverheadTotal DisbursementsReceiptsSelling and Administrative ExpensesSale of Marketable SecuritiesExcess (Deficiency) of Available Cash Over Cash Disbursements		enter a total amount for section two		enter a total amount for section two
select a summarizing line for the second partselect a summarizing line for the second part  Selling and Administrative ExpensesManufacturing OverheadReceiptsTotal Available CashRepaymentsEnding Cash BalanceDisbursementsDirect LaborTotal ReceiptsBeginning Cash BalanceTotal DisbursementsExcess (Deficiency) of Available Cash Over Cash DisbursementsSale of Marketable SecuritiesBorrowingsFinancingDirect MaterialsCollections from Customers		enter a total amount for the second part		enter a total amount for the second part
select an opening name for section threeselect an opening name for section three  Excess (Deficiency) of Available Cash Over Cash DisbursementsBeginning Cash BalanceDirect MaterialsRepaymentsDisbursementsSale of Marketable SecuritiesEnding Cash BalanceTotal ReceiptsCollections from CustomersSelling and Administrative ExpensesFinancingDirect LaborTotal Available CashManufacturing OverheadReceiptsTotal DisbursementsBorrowings
select between addition and deductionselect between addition and deduction  LessAdd:  select a cash budget itemselect a cash budget item  RepaymentsReceiptsTotal Available CashTotal DisbursementsFinancingEnding Cash BalanceSale of Marketable SecuritiesCollections from CustomersDisbursementsDirect MaterialsTotal ReceiptsBeginning Cash BalanceExcess (Deficiency) of Available Cash Over Cash DisbursementsManufacturing OverheadSelling and Administrative ExpensesBorrowingsDirect Labor		enter a dollar amount		enter a dollar amount
select between addition and deductionselect between addition and deduction  AddLess:  select a cash budget itemselect a cash budget item  Manufacturing OverheadCollections from CustomersReceiptsTotal ReceiptsBorrowingsBeginning Cash BalanceDisbursementsExcess (Deficiency) of Available Cash Over Cash DisbursementsEnding Cash BalanceDirect LaborFinancingSale of Marketable SecuritiesSelling and Administrative ExpensesRepaymentsDirect MaterialsTotal DisbursementsTotal Available Cash		enter a dollar amount		enter a dollar amount
select a closing cash budget itemselect a closing cash budget item  Total DisbursementsReceiptsFinancingExcess (Deficiency) of Available Cash Over Cash DisbursementsDirect MaterialsTotal Available CashTotal ReceiptsBeginning Cash BalanceSale of Marketable SecuritiesBorrowingsSelling and Administrative ExpensesDirect LaborEnding Cash BalanceRepaymentsManufacturing OverheadDisbursementsCollections from Customers		$ enter a total amount for the cash budget		$ enter a total amount for the cash budget

Answer 1

Solution:

Danner Company
Cash Budget
For January and February
Particulars	January	February
Beginning cash balance	$45,450.00	$27,775.00
Cash Receipts:
Collection from customers	$85,850.00	$151,500.00
Sales of marketable securities	$12,120.00	$0.00
Total cash available	$143,420.00	$179,275.00
Cash disbursements:
Payment for direct material	$50,500.00	$75,750.00
Direct labor	$30,300.00	$45,450.00
Manufacturing overhead	$19,695.00	$23,735.00
Selling and administrative expenses	$15,150.00	$20,200.00
Total Cash disbursements	$115,645.00	$165,135.00
Excess of cash available over disbursments	$27,775.00	$14,140.00
Borrowings (Repayments)	$0.00	$6,060.00
Ending cash balance	$27,775.00	$20,200.00