Rigley Company expects to have a cash balance of \(\$ 46,000\) on January 1, 2025. These are the relevant monthly budget data for the first two months of 2025.

1. Collections from customers: January \(\$ 71,000\) and February \(\$ 146,000\).

2. Payments to suppliers: January \(\$ 40,000\) and February \(\$ 75,000\).

3. Wages: January \(\$ 30,000\) and February \(\$ 40,000\). Wages are paid in the month they are incurred.

4. Administrative expenses: January \(\$ 21,000\) and February \(\$ 24,000\). These costs include depreciation of \(\$ 1,000\) per month. All other costs are paid as incurred.

5. Selling expenses: January \(\$ 15,000\) and February \(\$ 20,000\). These costs are exclusive of depreciation. They are paid as incurred.

6. Sales of short-term investments in January are expected to realize \(\$ 12,000\) in cash. Rigley has a line of credit at a local bank that enables it to borrow up to \(\$ 25,000\). The company wants to maintain a minimum monthly cash balance of \(\$ 20,000\).

Instructions

Prepare a cash budget for January and February.