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Colter Company prepares monthly cash budgets. Relevant data from operating budgets for 2022 are as follows. Sales Direct materials purchases Direct labor Manufacturing overhead Selling and administrative expenses Other data: 1. 2. All sales are on account. Collections are expected to be 50% in the month of sale, 30% in the first month following the sale, and 20% in the second month following the sale. Sixty percent (60%) of direct materials purchases are paid in cash in the month of purchase, and the balance due is paid in the month following the purchase. All other items above are paid in the month incurred except for selling and administrative expenses that include $1,000 of depreciation per month. 3. January February $360,000 $400,000 125,000 100,000 75,000 85,000 4. 120,000 90,000 70,000 79,000 Credit sales: November 2021, $250,000; December 2021, $320,000. Purchases of direct materials: December 2021, $100,000. Other receipts: January-Collection of December 31, 2021, notes receivable $15,000; February-Proceeds from sale of securities $6,000. Other disbursements: February-Payment of $6,000 cash dividend. The company's cash balance on January 1, 2022, is expected to be $60,000. The company wants to maintain a minimum cash balance of $50,000.

Colter Company prepares monthly cash budgets. Relevant data from operating budgets for 2022 are as follows. Sales Direct materials purchases Direct labor Manufacturing overhead Selling and administrative expenses Other data: 1. 2. All sales are on account. Collections are expected to be 50% in the month of sale, 30% in the first month following the sale, and 20% in the second month following the sale. Sixty percent (60%) of direct materials purchases are paid in cash in the month of purchase, and the balance due is paid in the month following the purchase. All other items above are paid in the month incurred except for selling and administrative expenses that include $1,000 of depreciation per month. 3. January February $360,000 $400,000 125,000 100,000 75,000 85,000 4. 120,000 90,000 70,000 79,000 Credit sales: November 2021, $250,000; December 2021, $320,000. Purchases of direct materials: December 2021, $100,000. Other receipts: January-Collection of December 31, 2021, notes receivable $15,000; February-Proceeds from sale of securities $6,000. Other disbursements: February-Payment of $6,000 cash dividend. The company's cash balance on January 1, 2022, is expected to be $60,000. The company wants to maintain a minimum cash balance of $50,000.

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter4: Financial Planning And Forecasting
Section: Chapter Questions
Problem 4P
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Prepare schedules for (1) expected collections from customers and (2) expected payments for direct materials purchases for January and February. November December January February December Total collections $ January COLTER COMPANY Schedule of Expected Collections from Customers February LA Total payments LA $ tA January COLTERCOMPANY Schedule of Expected Payments for Direct Materials $ January $ LA February LA February
Transcribed Image Text:Prepare schedules for (1) expected collections from customers and (2) expected payments for direct materials purchases for January and February. November December January February December Total collections $ January COLTER COMPANY Schedule of Expected Collections from Customers February LA Total payments LA $ tA January COLTERCOMPANY Schedule of Expected Payments for Direct Materials $ January $ LA February LA February
Colter Company prepares monthly cash budgets. Relevant data from operating budgets for 2022 are as follows. Sales Direct materials purchases Direct labor Manufacturing overhead Selling and administrative expenses Other data: 1. 2. 3. January February $360,000 $400,000 125,000 100,000 4. 120,000 All sales are on account. Collections are expected to be 50% in the month of sale, 30% in the first month following the sale, and 20% in the second month following the sale. Sixty percent (60%) of direct materials purchases are paid in cash in the month of purchase, and the balance due is paid in the month following the purchase. All other items above are paid in the month incurred except for selling and administrative expenses that include $1,000 of depreciation per month. 90,000 70,000 79,000 75,000 85,000 Credit sales: November 2021, $250,000; December 2021, $320,000. Purchases of direct materials: December 2021, $100,000. Other receipts: January-Collection of December 31, 2021, notes receivable $15,000; February-Proceeds from sale of securities $6,000. Other disbursements: February-Payment of $6,000 cash dividend. The company's cash balance on January 1, 2022, is expected to be $60,000. The company wants to maintain a minimum cash balance of $50,000.
Transcribed Image Text:Colter Company prepares monthly cash budgets. Relevant data from operating budgets for 2022 are as follows. Sales Direct materials purchases Direct labor Manufacturing overhead Selling and administrative expenses Other data: 1. 2. 3. January February $360,000 $400,000 125,000 100,000 4. 120,000 All sales are on account. Collections are expected to be 50% in the month of sale, 30% in the first month following the sale, and 20% in the second month following the sale. Sixty percent (60%) of direct materials purchases are paid in cash in the month of purchase, and the balance due is paid in the month following the purchase. All other items above are paid in the month incurred except for selling and administrative expenses that include $1,000 of depreciation per month. 90,000 70,000 79,000 75,000 85,000 Credit sales: November 2021, $250,000; December 2021, $320,000. Purchases of direct materials: December 2021, $100,000. Other receipts: January-Collection of December 31, 2021, notes receivable $15,000; February-Proceeds from sale of securities $6,000. Other disbursements: February-Payment of $6,000 cash dividend. The company's cash balance on January 1, 2022, is expected to be $60,000. The company wants to maintain a minimum cash balance of $50,000.
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