Colter Company prepares monthly cash budgets. Relevant data from operating budgets for 2017 are as follows: January February Sales $375,120 $416,800 Direct materials purchases 125,040 130,250 Direct labor 93,780 104,200 Manufacturing overhead 72,940 78,150 Selling and administrative expenses 82,318 88,570 All sales are on account. Collections are expected to be 50% in the month of sale, 30% in the first month following the sale, and 20% in the second month following the sale. Sixty percent (60%) of direct materials purchases are paid in cash in the month of purchase, and the balance due is paid in the month following the purchase. All other items above are paid in the month incurred except for selling and administrative expenses that include $1,042 of depreciation per month. Other data: 1. Credit sales: November 2016, $260,500; December 2016, $333,440. 2. Purchases of direct materials: December 2016, $104,200. 3. Other receipts: January—Collection of December 31, 2016, notes receivable $15,630; February—Proceeds from sale of securities $6,252. 4. Other disbursements: February—Payment of $6,252 cash dividend. The company’s cash balance on January 1, 2017, is expected to be $62,520. The company wants to maintain a minimum cash balance of $52,100. Prepare schedules for (1) expected collections from customers and (2) expected payments for direct materials purchases for January and February. Prepare a cash budget for January and February in columnar form
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