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Danner Company expects to have a cash balance of $46,350 on January 1, 2020. Relevant...

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Accounting

Danner Company expects to have a cash balance of $46,350 on January 1, 2020. Relevant monthly budget data for the first 2 months of 2020 are as follows.

Collections from customers: January $87,550, February $154,500.
Payments for direct materials: January $51,500, February $77,250.
Direct labor: January $30,900, February $46,350. Wages are paid in the month they are incurred.
Manufacturing overhead: January $21,630, February $25,750. These costs include depreciation of $1,545 per month. All other overhead costs are paid as incurred.
Selling and administrative expenses: January $15,450, February $20,600. These costs are exclusive of depreciation. They are paid as incurred.

Sales of marketable securities in January are expected to realize $12,360 in cash. Danner Company has a line of credit at a local bank that enables it to borrow up to $25,750. The company wants to maintain a minimum monthly cash balance of $20,600. Prepare a cash budget for January and February.

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