Part 1

Diaz Co. budgets sales of \(\$ 80,000\) for January and \(\$ 90,000\) for February. Seventy percent of Diaz's sales are for cash, and the remaining \(30 \%\) are credit sales. All credit sales are collected in the month after sale. December's total sales are \(\$ 66,667\). Prepare the schedule of cash receipts from sales for January and February.

Part 2
Use the following information to prepare a cash budget for the month ended January 31 for Garcia Company. The company requires a minimum \(\$ 30,000\) cash balance at the end of each month. Any preliminary cash balance above \(\$ 30,000\) is used to repay loans (if any). Garcia has a \(\$ 2,000\) loan outstanding at the beginning of January.
a. January 1 cash balance, \(\$ 30,000\)
b. Cash receipts from sales, \(\$ 132,000\)
c. Cash payments for direct materials, \(\$ 63,500\) ( \(1 \%\) of beginning loan balance of \(\$ 2,000\) )
d. Cash payments for direct labor, \(\$ 33,400\)
e. Cash paid for interest on loan, \(\$ 20\)
f. Cash repayment of loan, \(\$ 2,000\)
g. Cash paid for overhead, \(\$ 8,180\)