Nunez Company expects to have a cash balance of $45,000 on January 1, 2016. Relevant monthly budget

Question:

Nunez Company expects to have a cash balance of $45,000 on January 1, 2016. Relevant monthly budget data for the first two months of 2016 are as follows:
1. Collections from customers: January $100,000; February $160,000
2. Payments to suppliers: January $60,000; February $80,000
3. Direct labour: January $30,000; February $45,000. Wages are paid in the month they are incurred.
4. Manufacturing overhead: January $26,000; February $31,000. These costs include depreciation of $1,000 per month.
All other overhead costs are paid as incurred.
5. Selling and administrative expenses: January $15,000; February $20,000. These costs are exclusive of depreciation.
They are paid as incurred.
6. Sales of marketable securities in January are expected to realize $10,000 in cash.
Nunez Company has a at a local bank. It can borrow up to $25,000. The company wants to keep a mini- mum monthly cash balance of $25,000.
Instructions
Prepare a for January and February.
Cash Budget
A cash budget is an estimation of the cash flows for a business over a specific period of time. These cash inflows and outflows include revenues collected, expenses paid, and loans receipts and payment. Its primary purpose is to provide the... Line of Credit
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