Danner Company expects to have a cash balance of $48,150 on January 1, 2020. Relevant monthly budget data for the first 2 months of 2020 are as follows.Collections from customers: January $90,950, February $160,500.Payments for direct materials: January $53,500, February $80,250.Direct labor: January $32,100, February $48,150. Wages are paid in the month they are incurred.Manufacturing overhead: January $22,470, February $26,750. These costs include depreciation of $1,605 per month. All other overhead costs are paid as incurred.Selling and administrative expenses: January $16,050, February $21,400. These costs are exclusive of depreciation. They are paid as incurred.Sales of marketable securities in January are expected to realize $12,840 in cash. Danner Company has a line of credit at a local bank that enables it to borrow up to $26,750. The company wants to maintain a minimum monthly cash balance of $21,400.Prepare a cash budget for January and February.DANNER COMPANYCash Budgetchoose the accounting period For the Two Months Ending February 28, 2020February 28, 2020For the Quarter Ending February 28, 2020 January Februaryselect an opening cash budget item Beginning Cash BalanceBorrowingsCollections from CustomersDirect LaborDirect MaterialsDisbursementsEnding Cash BalanceExcess (Deficiency) of Available Cash Over Cash DisbursementsFinancingManufacturing OverheadReceiptsRepaymentsSale of Marketable SecuritiesSelling and Administrative ExpensesTotal Available CashTotal DisbursementsTotal Receipts $enter a dollar amount select between addition and deduction AddLess: select an opening name for section one Beginning Cash BalanceBorrowingsCollections from CustomersDirect LaborDirect MaterialsDisbursementsEnding Cash BalanceExcess (Deficiency) of Available Cash Over Cash DisbursementsFinancingManufacturing OverheadReceiptsRepaymentsSale of Marketable SecuritiesSelling and Administrative ExpensesTotal Available CashTotal DisbursementsTotal Receipts select a cash budget item Beginning Cash BalanceBorrowingsCollections from CustomersDirect LaborDirect MaterialsDisbursementsEnding Cash BalanceExcess (Deficiency) of Available Cash Over Cash DisbursementsFinancingManufacturing OverheadReceiptsRepaymentsSale of Marketable SecuritiesSelling and Administrative ExpensesTotal Available CashTotal DisbursementsTotal Receipts enter a dollar amount select a cash budget item enter a dollar amount select a closing name for section one enter a total amount for section one select a summarizing line for the first part enter a total amount for the first part select between addition and deduction AddLess: select an opening name for section two Beginning Cash BalanceBorrowingsCollections from CustomersDirect LaborDirect MaterialsDisbursementsEnding Cash BalanceExcess (Deficiency) of Available Cash Over Cash DisbursementsFinancingManufacturing OverheadReceiptsRepaymentsSale of Marketable SecuritiesSelling and Administrative ExpensesTotal Available CashTotal DisbursementsTotal Receipts select a cash budget item enter a dollar amount select a cash budget item enter a dollar amount select a cash budget item enter a dollar amount select a cash budget item enter a dollar amount select a closing name for section two enter a total amount for section two select a summarizing line for the second part enter a total amount for the second part select an opening name for section three select between addition and deduction AddLess: select a cash budget item Beginning Cash BalanceBorrowingsCollections from CustomersDirect LaborDirect MaterialsDisbursementsEnding Cash BalanceExcess (Deficiency) of Available Cash Over Cash DisbursementsFinancingManufacturing OverheadReceiptsRepaymentsSale of Marketable SecuritiesSelling and Administrative ExpensesTotal Available CashTotal DisbursementsTotal Receipts enter a dollar amount select between addition and deduction AddLess: enter a dollar amount select a closing cash budget item $enter a total amount for the cash budget

Cash budget: It is that tool, which indicates the amount of available cash is appropriate or not for…

Answered: Danner Company expects to have a cash…

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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Danner Company expects to have a cash balance of $48,150 on January 1, 2020. Relevant monthly budget data for the first 2 months of 2020 are as follows.

Collections from customers: January $90,950, February $160,500.

Payments for direct materials: January $53,500, February $80,250.

Direct labor: January $32,100, February $48,150. Wages are paid in the month they are incurred.

Manufacturing overhead: January $22,470, February $26,750. These costs include depreciation of $1,605 per month. All other overhead costs are paid as incurred.

Selling and administrative expenses: January $16,050, February $21,400. These costs are exclusive of depreciation. They are paid as incurred.

Sales of marketable securities in January are expected to realize $12,840 in cash. Danner Company has a line of credit at a local bank that enables it to borrow up to $26,750. The company wants to maintain a minimum monthly cash balance of $21,400.

Prepare a cash budget for January and February.

DANNER COMPANY Cash Budget choose the accounting period For the Two Months Ending February 28, 2020February 28, 2020For the Quarter Ending February 28, 2020
	January	February
select an opening cash budget item Beginning Cash BalanceBorrowingsCollections from CustomersDirect LaborDirect MaterialsDisbursementsEnding Cash BalanceExcess (Deficiency) of Available Cash Over Cash DisbursementsFinancingManufacturing OverheadReceiptsRepaymentsSale of Marketable SecuritiesSelling and Administrative ExpensesTotal Available CashTotal DisbursementsTotal Receipts	$enter a dollar amount
select between addition and deduction AddLess: select an opening name for section one Beginning Cash BalanceBorrowingsCollections from CustomersDirect LaborDirect MaterialsDisbursementsEnding Cash BalanceExcess (Deficiency) of Available Cash Over Cash DisbursementsFinancingManufacturing OverheadReceiptsRepaymentsSale of Marketable SecuritiesSelling and Administrative ExpensesTotal Available CashTotal DisbursementsTotal Receipts
select a cash budget item Beginning Cash BalanceBorrowingsCollections from CustomersDirect LaborDirect MaterialsDisbursementsEnding Cash BalanceExcess (Deficiency) of Available Cash Over Cash DisbursementsFinancingManufacturing OverheadReceiptsRepaymentsSale of Marketable SecuritiesSelling and Administrative ExpensesTotal Available CashTotal DisbursementsTotal Receipts	enter a dollar amount
select a cash budget item	enter a dollar amount
select a closing name for section one	enter a total amount for section one
select a summarizing line for the first part	enter a total amount for the first part
select between addition and deduction AddLess: select an opening name for section two Beginning Cash BalanceBorrowingsCollections from CustomersDirect LaborDirect MaterialsDisbursementsEnding Cash BalanceExcess (Deficiency) of Available Cash Over Cash DisbursementsFinancingManufacturing OverheadReceiptsRepaymentsSale of Marketable SecuritiesSelling and Administrative ExpensesTotal Available CashTotal DisbursementsTotal Receipts
select a cash budget item	enter a dollar amount
select a cash budget item	enter a dollar amount
select a cash budget item	enter a dollar amount
select a cash budget item	enter a dollar amount
select a closing name for section two	enter a total amount for section two
select a summarizing line for the second part	enter a total amount for the second part
select an opening name for section three
select between addition and deduction AddLess: select a cash budget item Beginning Cash BalanceBorrowingsCollections from CustomersDirect LaborDirect MaterialsDisbursementsEnding Cash BalanceExcess (Deficiency) of Available Cash Over Cash DisbursementsFinancingManufacturing OverheadReceiptsRepaymentsSale of Marketable SecuritiesSelling and Administrative ExpensesTotal Available CashTotal DisbursementsTotal Receipts	enter a dollar amount
select between addition and deduction AddLess:	enter a dollar amount
select a closing cash budget item	$enter a total amount for the cash budget

Definition Definition Estimate of an organization's cash flow for a future period. A cash budget forecasts future cash receipts and payments from various sources for a fiscal year. A cash budget can be created once a month or once a week to determine the organization's cash position and ensure its performance in relation to the budget. It aids in determining whether the company has enough cash and cash equivalents to meet its operational needs in the future.

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