Danner Company expects to have a cash balance of $45,000 on January 1, 2020. Relevant monthly budget data for the first 2 months of 2020 are asfollows.Collections from customers: January $85,000, February $150,000.Payments for direct materials: January $50,000, February $75,000.Direct labor: January $30,000, February $45,000. Wages are paid in the month they are incurred.Manufacturing overhead: January $21,000, February $25,000. These costs include depreciation of $1,500 per month. All other overhead costs arepaid as incurred.Selling and administrative expenses: January $15,000, February $20,000. These costs are exclusive of depreciation. They are paid as incurred.Sales of marketable securities in January are expected to realize $12,000 in cash. Danner Company has a line of credit at a local bank that enables it toborrow up to $25,000. The company wants to maintain a minimum monthly cash balance of $20,000.Prepare a cash budget for January and February. V:DANNER COMPANYCash Budget$14January$February

Ending cash balance = Beginning balance + Cash receipt - Cash disbursements + Borrowings -…

Danner Company expects to have a cash balance of $45,000 on January 1, 2020. Relevant monthly budget data for the follows. Collections from customers: January $85,000, February $150,000. Payments for direct materials: January $50,000, February $75,000. Direct labor: January $30,000, February $45,000. Wages are paid in the month they are incurred. Manufacturing overhead: January $21,000, February $25,000. These costs include depreciation of $1,500 per month. All other overhead costs paid as incurred. Selling and administrative expenses: January $15,000, February $20,000. These costs are exclusive of depreciation. They are paid as incurred. Sales of marketable securities in January are expected to realize $12,000 in cash. Danner Company has a line of credit at a local bank that enabl borrow up to $25,000. The company wants to maintain a minimum monthly cash balance of $20,000.

Danner Company expects to have a cash balance of $45,000 on January 1, 2020. Relevant monthly budget data for the follows. Collections from customers: January $85,000, February $150,000. Payments for direct materials: January $50,000, February $75,000. Direct labor: January $30,000, February $45,000. Wages are paid in the month they are incurred. Manufacturing overhead: January $21,000, February $25,000. These costs include depreciation of $1,500 per month. All other overhead costs paid as incurred. Selling and administrative expenses: January $15,000, February $20,000. These costs are exclusive of depreciation. They are paid as incurred. Sales of marketable securities in January are expected to realize $12,000 in cash. Danner Company has a line of credit at a local bank that enabl borrow up to $25,000. The company wants to maintain a minimum monthly cash balance of $20,000.

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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