Question

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
		$enter a dollar
		enter a dollar amount		enter a dollar amount
		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
		enter a dollar amount		enter a dollar amount
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		enter a dollar amount		enter a dollar amount
		enter a dollar
		enter a dollar amount		enter a dollar amount
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

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