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Waterway Company expects to have a cash balance of $45,900 on January 1, 2027. Relevant monthly budget data for the first 2 months of 2027 are as follows. Collections from customers: January $86,700, February $153,000. Payments for direct materials: January $51,000, February $76,500. Direct labor: January $30,600, February $45,900. Wages are paid in the month they are incurred. Manufacturing overhead: January $21,420, February $25,500. These costs include depreciation of $1,530 per month. All other overhead costs are paid as incurred. Selling and administrative expenses: January $15,300, February $20,400. These costs are exclusive of depreciation. They are paid as incurred. Sales of marketable securities in January are expected to realize $12,240 in cash. Waterway Company has a line of credit at a local bank that enables it to borrow up to $25,500. The company wants to maintain a minimum monthly cash balance of $20,400. Prepare a cash budget for January and February. Beginning Cash Balance Add ▼ Collections from Customers Collections from Customers Sale of Marketable Securities Total Available Cash Direct Materials Less ▼ Disbursements Direct Materials Direct Labor Manufacturing Overhead Selling and Administrative Expenses Total Disbursements Ending Cash Balance Financing Less ▼ Borrowings Less Ending Cash Balance 45900 86700 12240 i 51000 30600 19890 i 15300

Waterway Company expects to have a cash balance of $45,900 on January 1, 2027. Relevant monthly budget data for the first 2 months of 2027 are as follows. Collections from customers: January $86,700, February $153,000. Payments for direct materials: January $51,000, February $76,500. Direct labor: January $30,600, February $45,900. Wages are paid in the month they are incurred. Manufacturing overhead: January $21,420, February $25,500. These costs include depreciation of $1,530 per month. All other overhead costs are paid as incurred. Selling and administrative expenses: January $15,300, February $20,400. These costs are exclusive of depreciation. They are paid as incurred. Sales of marketable securities in January are expected to realize $12,240 in cash. Waterway Company has a line of credit at a local bank that enables it to borrow up to $25,500. The company wants to maintain a minimum monthly cash balance of $20,400. Prepare a cash budget for January and February. Beginning Cash Balance Add ▼ Collections from Customers Collections from Customers Sale of Marketable Securities Total Available Cash Direct Materials Less ▼ Disbursements Direct Materials Direct Labor Manufacturing Overhead Selling and Administrative Expenses Total Disbursements Ending Cash Balance Financing Less ▼ Borrowings Less Ending Cash Balance 45900 86700 12240 i 51000 30600 19890 i 15300

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter12: Fainancial Statement Analysis
Section: Chapter Questions
Problem 16MCQ
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Waterway Company expects to have a cash balance of $45,900 on January 1, 2027. Relevant monthly budget data for the first 2 months of 2027 are as follows. Collections from customers: January $86,700, February $153,000. Payments for direct materials: January $51,000, February $76,500. Direct labor: January $30,600, February $45,900. Wages are paid in the month they are incurred. Manufacturing overhead: January $21,420, February $25,500. These costs include depreciation of $1,530 per month. All other overhead costs are paid as incurred. Selling and administrative expenses: January $15,300, February $20,400. These costs are exclusive of depreciation. They are paid as incurred. Sales of marketable securities in January are expected to realize $12,240 in cash. Waterway Company has a line of credit at a local bank that enables it to borrow up to $25,500. The company wants to maintain a minimum monthly cash balance of $20,400. Prepare a cash budget for January and February.
Transcribed Image Text:Waterway Company expects to have a cash balance of $45,900 on January 1, 2027. Relevant monthly budget data for the first 2 months of 2027 are as follows. Collections from customers: January $86,700, February $153,000. Payments for direct materials: January $51,000, February $76,500. Direct labor: January $30,600, February $45,900. Wages are paid in the month they are incurred. Manufacturing overhead: January $21,420, February $25,500. These costs include depreciation of $1,530 per month. All other overhead costs are paid as incurred. Selling and administrative expenses: January $15,300, February $20,400. These costs are exclusive of depreciation. They are paid as incurred. Sales of marketable securities in January are expected to realize $12,240 in cash. Waterway Company has a line of credit at a local bank that enables it to borrow up to $25,500. The company wants to maintain a minimum monthly cash balance of $20,400. Prepare a cash budget for January and February.
Beginning Cash Balance Add ▼ Collections from Customers Collections from Customers Sale of Marketable Securities Total Available Cash Direct Materials Less ▼ Disbursements Direct Materials Direct Labor Manufacturing Overhead Selling and Administrative Expenses Total Disbursements Ending Cash Balance Financing Less ▼ Borrowings Less Ending Cash Balance 45900 86700 12240 i 51000 30600 19890 i 15300
Transcribed Image Text:Beginning Cash Balance Add ▼ Collections from Customers Collections from Customers Sale of Marketable Securities Total Available Cash Direct Materials Less ▼ Disbursements Direct Materials Direct Labor Manufacturing Overhead Selling and Administrative Expenses Total Disbursements Ending Cash Balance Financing Less ▼ Borrowings Less Ending Cash Balance 45900 86700 12240 i 51000 30600 19890 i 15300
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