Nunez Company expects to have a cash balance of $43,000 on January 1, 2020. Relevant monthly budget data for the first two months of 2020 are as follows: 

1. Collections from customers: January $101,000; February $158,000 

2. Payments to suppliers: January $59,000; February $81,000 

3. Direct labour: January $31,000; February $46,000. Wages are paid in the month they are Incurred. 

4. Manufacturing overhead: January $25,000; February $31,000. These costs Include deprecation of $1,000 per month. All other overhead costs are paid as Incurred. 

5. Selling and administrative expenses: January $16,000; February $21,000. These costs are exclusive of deprecation. They are paid as Incurred.

6. Sales of marketable securities In January are expected to realize $11,000 In cash. 

Nunez Company has a line of credit at a local bank. It can borrow up to $24,000. The company wants to keep a minimum monthly cash balance of $25,000. 

Prepare a cash budget for January and February. 

Answer rating: 100% (QA)

Solution Cash Budget Beginning Cash Balance Add Cash Receipts Collection From Customers Sale Of Mark... View the full answer