Waterway Company prepares monthly cash budgets. Relevant data from operating budgets for 2027 are as follows. January February Sales $460,800 $512,000 Direct materials purchases 153,600 160,000 Direct labor 115,200 128,000 Manufacturing overhead 89,600 96,000 Selling and administrative expenses 101,120 108,800 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, which include $1,280 of depreciation per month. Other data: 1. Credit sales: November 2026, $320,000; December 2026, $409,600. 2. Purchases of direct materials: December 2026, $128,000. 3. Other receipts: January-Collection of December 31, 2026, notes receivable $19,200; February-Proceeds from sale of securities $7,680. 4. Other disbursements: February-Payment of $7,680 cash dividend. The company's cash balance on January 1, 2027, is expected to be $76,800. The company wants to maintain a minimum cash balance of $64,000. Prepare a cash budget for January and February in columnar form. く ✓ WATERWAY COMPANY Cash Budget January $ $
Waterway Company prepares monthly cash budgets. Relevant data from operating budgets for 2027 are as follows. January February Sales $460,800 $512,000 Direct materials purchases 153,600 160,000 Direct labor 115,200 128,000 Manufacturing overhead 89,600 96,000 Selling and administrative expenses 101,120 108,800 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, which include $1,280 of depreciation per month. Other data: 1. Credit sales: November 2026, $320,000; December 2026, $409,600. 2. Purchases of direct materials: December 2026, $128,000. 3. Other receipts: January-Collection of December 31, 2026, notes receivable $19,200; February-Proceeds from sale of securities $7,680. 4. Other disbursements: February-Payment of $7,680 cash dividend. The company's cash balance on January 1, 2027, is expected to be $76,800. The company wants to maintain a minimum cash balance of $64,000. Prepare a cash budget for January and February in columnar form. く ✓ WATERWAY COMPANY Cash Budget January $ $
Chapter4: Financial Planning And Forecasting
Section: Chapter Questions
Problem 5P
Related questions
Question
Transcribed Image Text:Waterway Company prepares monthly cash budgets. Relevant data from operating budgets for 2027 are as follows.
January
February
Sales
$460,800 $512,000
Direct materials purchases
153,600 160,000
Direct labor
115,200
128,000
Manufacturing overhead
89,600
96,000
Selling and administrative expenses 101,120
108,800
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, which include $1,280 of depreciation per month.
Other data:
1.
Credit sales: November 2026, $320,000; December 2026, $409,600.
2.
Purchases of direct materials: December 2026, $128,000.
3.
Other receipts: January-Collection of December 31, 2026, notes receivable $19,200;
February-Proceeds from sale of securities $7,680.
4.
Other disbursements: February-Payment of $7,680 cash dividend.
The company's cash balance on January 1, 2027, is expected to be $76,800. The company wants to maintain a minimum cash balance
of $64,000.
Prepare a cash budget for January and February in columnar form.
く
✓
WATERWAY COMPANY
Cash Budget
January
$
$
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