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Shefeld Company prepares monthly cash budgets. Relevant data from operating budgets for 2023 are as follows: January February Sales $349,000 $404,000 Direct materials purchases 119,000 111,000 Direct labour 86,000 111,000 Manufacturing overhead 61,000 74,000 Selling and administrative expenses 74,000 80,000 All sales are on account. Shefeld expects collections to be 50% in the month of sale, 40% in the rst month following the sale, and 10% in the second month following the sale. It pays 30% of direct materials purchases in cash in the month of purchase and the balance due in the month following the purchase. Other data are as follows: 1. Credit sales: November 2022, $198,000; December 2022, $282,000 2. Purchases of direct materials: December 2022, $91,000 3. Other receipts: Januarycollection of December 31,2022, notes receivable $5,000; Februaryproceeds from sale of securities $6,000 4. Other disbursements: Februarypayment of $20,000 for land The company expects its cash balance on January 1, 2023, to be $50,000. It wants to maintain a minimum cash balance of $40,000. Prepare a cash budget for January and February using columns for each month. LORCH COMPANY Cash Budget For the Two Months Ending February 28, 2023 Jan Feb $ :5 Purchase of land Cash receipts V Total receipts Direct materials Proceeds from sale of securities Total disbursements Ending cash balance Collection of notes receivable Beginning cash balance Interest expenses Collection from credit sales Disbursements Direct labour Repayment Financing Borrowing v Manufacturing overhead Total available cash Selling and administrative expenses V \f

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