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Crane Company expects to have a cash balance of $36,000 on January 1, 2025. Relevant monthly budget data for the first 2 months of 2025 are as follows. Collections from customers: January $68,000, February $120,000. Payments for direct materials: January $40,000, February $60,000. Direct labor: January $24,000, February $36,000. Wages are paid in the month they are incurred. Manufacturing overhead: January $16,800, February $20,000. These costs include depreciation of $1,200 per month. All other overhead costs are paid as incurred. Selling and administrative expenses: January $12,000, February $16,000. These costs are exclusive of depreciation. They are paid as incurred. Sales of marketable securities in January are expected to realize $9,600 in cash. Crane Company has a line of credit at a local bank that enables it to borrow up to $20,000. The company wants to maintain a minimum monthly cash balance of $16,000. Prepare a cash budget for January and February. CRANE COMPANY Cash Budget For the Quarter Ending February 28, 2025 January February

Crane Company expects to have a cash balance of $36,000 on January 1, 2025. Relevant monthly budget data for the first 2 months of 2025 are as follows. Collections from customers: January $68,000, February $120,000. Payments for direct materials: January $40,000, February $60,000. Direct labor: January $24,000, February $36,000. Wages are paid in the month they are incurred. Manufacturing overhead: January $16,800, February $20,000. These costs include depreciation of $1,200 per month. All other overhead costs are paid as incurred. Selling and administrative expenses: January $12,000, February $16,000. These costs are exclusive of depreciation. They are paid as incurred. Sales of marketable securities in January are expected to realize $9,600 in cash. Crane Company has a line of credit at a local bank that enables it to borrow up to $20,000. The company wants to maintain a minimum monthly cash balance of $16,000. Prepare a cash budget for January and February. CRANE COMPANY Cash Budget For the Quarter Ending February 28, 2025 January February

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Crane Company expects to have a cash balance of $36,000 on January 1, 2025. Relevant monthly budget data for the first 2 months of 2025 are as follows. Collections from customers: January $68,000, February $120,000. Payments for direct materials: January $40,000, February $60,000. Direct labor: January $24,000, February $36,000. Wages are paid in the month they are incurred. Manufacturing overhead: January $16,800, February $20,000. These costs include depreciation of $1,200 per month. All other overhead costs are paid as incurred. Selling and administrative expenses: January $12,000, February $16,000. These costs are exclusive of depreciation. They are paid as incurred. Sales of marketable securities in January are expected to realize $9,600 in cash. Crane Company has a line of credit at a local bank that enables it to borrow up to $20,000. The company wants to maintain a minimum monthly cash balance of $16,000. Prepare a cash budget for January and February. CRANE COMPANY Cash Budget For the Quarter Ending February 28, 2025 January February
Transcribed Image Text:Crane Company expects to have a cash balance of $36,000 on January 1, 2025. Relevant monthly budget data for the first 2 months of 2025 are as follows. Collections from customers: January $68,000, February $120,000. Payments for direct materials: January $40,000, February $60,000. Direct labor: January $24,000, February $36,000. Wages are paid in the month they are incurred. Manufacturing overhead: January $16,800, February $20,000. These costs include depreciation of $1,200 per month. All other overhead costs are paid as incurred. Selling and administrative expenses: January $12,000, February $16,000. These costs are exclusive of depreciation. They are paid as incurred. Sales of marketable securities in January are expected to realize $9,600 in cash. Crane Company has a line of credit at a local bank that enables it to borrow up to $20,000. The company wants to maintain a minimum monthly cash balance of $16,000. Prepare a cash budget for January and February. CRANE COMPANY Cash Budget For the Quarter Ending February 28, 2025 January February
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