Question

Danner Company expects to have a cash balance of $55,800 on January 1, 2020. Relevant monthly...

Danner Company expects to have a cash balance of $55,800 on January 1, 2020. Relevant monthly budget data for the first 2 months of 2020 are as follows.

Collections from customers: January $105,400, February $186,000.
Payments for direct materials: January $62,000, February $93,000.
Direct labor: January $37,200, February $55,800. Wages are paid in the month they are incurred.
Manufacturing overhead: January $26,040, February $31,000. These costs include depreciation of $1,860 per month. All other overhead costs are paid as incurred.
Selling and administrative expenses: January $18,600, February $24,800. These costs are exclusive of depreciation. They are paid as incurred.


Sales of marketable securities in January are expected to realize $14,880 in cash. Danner Company has a line of credit at a local bank that enables it to borrow up to $31,000. The company wants to maintain a minimum monthly cash balance of $24,800.

Prepare a cash budget for January and February.

DANNER COMPANY
Cash Budget

January

February

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enter a dollar amount enter a dollar amount
enter a total
enter a total amount for the first part enter a total amount for the first part

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select a cash budget itemRepaymentsDirect MaterialsTotal DisbursementsManufacturing OverheadSale of Marketable SecuritiesDirect LaborReceiptsTotal ReceiptsBorrowingsTotal Available CashFinancingBeginning Cash BalanceSelling and Administrative ExpensesExcess (Deficiency) of Available Cash Over Cash DisbursementsCollections from CustomersDisbursementsEnding Cash Balance Beginning Cash BalanceBorrowingsCollections from CustomersDirect LaborDirect MaterialsDisbursementsEnding Cash BalanceExcess (Deficiency) of Available Cash Over Cash DisbursementsFinancingManufacturing OverheadReceiptsRepaymentsSale of Marketable SecuritiesSelling and Administrative ExpensesTotal Available CashTotal DisbursementsTotal Receipts

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select a closing name for section twoBeginning Cash BalanceTotal ReceiptsCollections from CustomersDirect MaterialsTotal Available CashEnding Cash BalanceManufacturing OverheadDirect LaborDisbursementsTotal DisbursementsBorrowingsReceiptsSelling and Administrative ExpensesFinancingSale of Marketable SecuritiesRepaymentsExcess (Deficiency) of Available Cash Over Cash Disbursements Beginning Cash BalanceBorrowingsCollections from CustomersDirect LaborDirect MaterialsDisbursementsEnding Cash BalanceExcess (Deficiency) of Available Cash Over Cash DisbursementsFinancingManufacturing OverheadReceiptsRepaymentsSale of Marketable SecuritiesSelling and Administrative ExpensesTotal Available CashTotal DisbursementsTotal Receipts

enter a total amount for section two enter a total amount for section two

select a summarizing line for the second partTotal ReceiptsSale of Marketable SecuritiesSelling and Administrative ExpensesDirect LaborDisbursementsExcess (Deficiency) of Available Cash Over Cash DisbursementsCollections from CustomersTotal

enter a total amount for the second part enter a total amount for the second part

select an opening name for section threeDirect LaborReceiptsExcess (Deficiency) of Available Cash Over Cash DisbursementsSelling and Administrative ExpensesCollections from CustomersEnding Cash BalanceFinancingTotal ReceiptsTotal DisbursementsRepaymentsTotal Available CashDirect MaterialsBeginning Cash BalanceManufacturing OverheadBorrowingsDisbursementsSale of Marketable Securities Beginning Cash BalanceBorrowingsCollections from CustomersDirect LaborDirect MaterialsDisbursementsEnding Cash BalanceExcess (Deficiency) of Available Cash Over Cash DisbursementsFinancingManufacturing OverheadReceiptsRepaymentsSale of Marketable SecuritiesSelling and Administrative ExpensesTotal Available CashTotal DisbursementsTotal Receipts

select between addition and deductionAddLess AddLess: select a cash budget item Beginning Cash BalanceBorrowingsTotal Available CashEnding Cash BalanceManufacturing OverheadTotal ReceiptsRepaymentsSale of Marketable SecuritiesCollections from CustomersTotal DisbursementsExcess (Deficiency) of Available Cash Over Cash DisbursementsSelling and Administrative ExpensesDisbursementsReceiptsFinancingDirect LaborDirect Materials Beginning Cash BalanceBorrowingsCollections from CustomersDirect LaborDirect MaterialsDisbursementsEnding Cash BalanceExcess (Deficiency) of Available Cash Over Cash DisbursementsFinancingManufacturing OverheadReceiptsRepaymentsSale of Marketable SecuritiesSelling and Administrative ExpensesTotal Available CashTotal DisbursementsTotal Receipts

enter a dollar amount

enter a dollar amount

select between addition and deductionAddLess AddLess: select a cash budget item BorrowingsRepaymentsTotal ReceiptsCollections from CustomersExcess (Deficiency) of Available Cash Over Cash DisbursementsEnding Cash BalanceDisbursementsBeginning Cash BalanceTotal DisbursementsSelling and Administrative ExpensesDirect LaborDirect MaterialsReceiptsTotal Available CashSale of Marketable SecuritiesManufacturing OverheadFinancing Beginning Cash BalanceBorrowingsCollections from CustomersDirect LaborDirect MaterialsDisbursementsEnding Cash BalanceExcess (Deficiency) of Available Cash Over Cash DisbursementsFinancingManufacturing OverheadReceiptsRepaymentsSale of Marketable SecuritiesSelling and Administrative ExpensesTotal Available CashTotal DisbursementsTotal Receipts

enter a dollar amount enter a dollar amount

select a closing cash budget itemSelling and Administrative ExpensesFinancingTotal Available CashEnding Cash BalanceExcess (Deficiency) of Available Cash Over Cash DisbursementsTotal DisbursementsTotal ReceiptsReceiptsDirect LaborDirect MaterialsDisbursementsBorrowingsManufacturing OverheadRepaymentsSale of Marketable SecuritiesBeginning Cash BalanceCollections from Customers Beginning Cash BalanceBorrowingsCollections from CustomersDirect LaborDirect MaterialsDisbursementsEnding Cash BalanceExcess (Deficiency) of Available Cash Over Cash DisbursementsFinancingManufacturing OverheadReceiptsRepaymentsSale of Marketable SecuritiesSelling and Administrative ExpensesTotal Available CashTotal DisbursementsTotal Receipts

$enter a total amount for the cash budget $enter a total amount for the cash budget

Homework Answers

Answer #1

Cash budget

January February
Beginning Cash Balance 55,800 34,100
Receipts
Collections from Customers 105,400 186,000
Sale of Marketable Securities 14,880 0
Total Receipts 120,280 186,000
Total Available Cash 176,080 220,100
Disbursements
Direct Materials 62,000 93,000
Direct Labor 37,200 55,800
Manufacturing Overhead 24,180 29,140
Selling and Administrative Expenses 18,600 24,800
Total Disbursements 141,980 202,740
Excess of Available Cash Over Cash Disbursements 34,100 17,360
Financing
Borrowings 0 13,640
Ending Cash Balance 34,100 31,000
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