Crane Company expects to have a cash balance of $36,000 on January 1,2022. Relevant monthly budget data for the first 2 months of 2022 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. Receipts Collections from Customers Ending Cash Balance Direct Materials Selling and Administrative Expenses Disbursements Manufacturing Overhead Borrowings Total Cash Available Total Disbursements Excess (Deficiency) of Available Cash Over Cash DIsbursements Sales Of Marketable Securities Direct Labor Total Receipts Repayments Beginning Cash Balance Financing

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Crane Company expects to have a cash balance of $36,000 on January 1,2022. Relevant monthly budget data for the first 2 months of 2022 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.

Receipts
Collections from Customers
Ending Cash Balance
Direct Materials
Selling and Administrative Expenses
Disbursements
Manufacturing Overhead
Borrowings
Total Cash Available
Total Disbursements
Excess (Deficiency) of Available Cash Over Cash DIsbursements
Sales Of Marketable Securities
Direct Labor
Total Receipts
Repayments
Beginning Cash Balance
Financing

Beginning Cash Balance
Add
Collections from Customers
Sale of Marketable Securities
Total Receipts
Total Available Cash
Less
Direct Labor
Receipts
Direct Materials
Financing
Selling and Administrative Expenses
Disbursements
Total Available Cash
Financing
Add
Excess (Deficiency) of Available Cash Over Cash Disbursements
Less
V: Borrowings
Repayments
CRANE COMPANY
Cash Budget
For the Two Months Ending February 28, 2022
Ending Cash Balance
+A
EA
January
36,000
68,000
9.600
200,000
133600
40,000
24,000
15,600
12,000
i
i
i
91,600 i
42,000
26,000
$
Feb
10000 In
lin
Transcribed Image Text:Beginning Cash Balance Add Collections from Customers Sale of Marketable Securities Total Receipts Total Available Cash Less Direct Labor Receipts Direct Materials Financing Selling and Administrative Expenses Disbursements Total Available Cash Financing Add Excess (Deficiency) of Available Cash Over Cash Disbursements Less V: Borrowings Repayments CRANE COMPANY Cash Budget For the Two Months Ending February 28, 2022 Ending Cash Balance +A EA January 36,000 68,000 9.600 200,000 133600 40,000 24,000 15,600 12,000 i i i 91,600 i 42,000 26,000 $ Feb 10000 In lin
Balance
Receipts
m Customers
able Securities
Cash
Disbursements
Is
ministrative Expenses
e Cash
cy) of Available Cash Over Cash Disbursements
Borrowings
Repayments
CRANE COMPANY
Cash Budget
For the Two Months Ending February 28, 2022 ✓
ance
<
EA
EA
January
36,000
68,000
9.600
200,000
133600
40,000
24,000
15.600 i
12,000
i
91,600
i
42,000
26,000
VA
$
February
42,000
12,000
16200
60,000 i
36,000 i
18,800 i
16,000 i
130,800
31,200
16,000
15,002
Transcribed Image Text:Balance Receipts m Customers able Securities Cash Disbursements Is ministrative Expenses e Cash cy) of Available Cash Over Cash Disbursements Borrowings Repayments CRANE COMPANY Cash Budget For the Two Months Ending February 28, 2022 ✓ ance < EA EA January 36,000 68,000 9.600 200,000 133600 40,000 24,000 15.600 i 12,000 i 91,600 i 42,000 26,000 VA $ February 42,000 12,000 16200 60,000 i 36,000 i 18,800 i 16,000 i 130,800 31,200 16,000 15,002
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