Reference no: EM131756677

Question: Danner Company expects to have a cash balance of $45,045 on January 1, 2017. Relevant monthly budget data for the first 2 months of 2017 are as follows:

Collections from customers: January $85,085, February $150,150. Payments for direct materials: January $50,050, February $75,075. Direct labor: January $30,030, February $45,045. Wages are paid in the month they are incurred. Manufacturing overhead: January $21,021, February $25,025. These costs include depreciation of $1,502 per month. All other overhead costs are paid as incurred. Selling and administrative expenses: January $15,015, February $20,020. These costs are exclusive of depreciation. They are paid as incurred.

Sales of marketable securities in January are expected to realize $12,012 in cash. Danner Company has a line of credit at a local bank that enables it to borrow up to $25,025. The company wants to maintain a minimum monthly cash balance of $20,020.

Prepare a cash budget for January and February. (Do not leave any answer field blank. Enter "0" for amounts.)