Reference no: EM132732776
Problem - Pina Colada Corp. prepares monthly cash budgets. Here are relevant data from operating budgets for 2017.
|
January
|
February
|
Sales
|
$361,400
|
$400,700
|
Purchases
|
120,900
|
130,300
|
Salaries
|
84,800
|
81,400
|
Administrative expenses
|
70,800
|
73,400
|
Selling expenses
|
78,200
|
86,500
|
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 $1,400 of depreciation per month.
Other data -
1. Collections from customers: January $335,600; February $378,100.
2. Payments for purchases: January $104,500; February $141,100.
3. Other receipts: January: collection of December 31, 2016, notes receivable $17,800; February: proceeds from sale of securities $6,200.
4. Other disbursements: February $12,800 cash dividend.
The company's cash balance on January 1, 2017, is expected to be $48,000. The company wants to maintain a minimum cash balance of $61,380.
Required - Prepare a cash budget for January and February.