Lorch Company prepares monthly cash budgets. Relevant data from operating budgets for 2021 are as follows:

		January		February
Sales		$349,000		$400,000
Direct materials purchases		121,000		109,000
Direct labour		86,000		113,000
Manufacturing overhead		60,000		75,000
Selling and administrative expenses		76,000		81,000

All sales are on account. Lorch expects collections to be 50% in the month of sale, 40% in the first month following the sale, and 10% in the second month following the sale. It pays 30% of direct materials purchases in cash in the month of purchase and the balance due in the month following the purchase. Other data are as follows:

1.	Credit sales: November 2020, $202,000; December 2020, $280,000
2.	Purchases of direct materials: December 2020, $89,000
3.	Other receipts: Januarycollection of December 31, 2020, notes receivable $5,000; Februaryproceeds from sale of securities $5,000
4.	Other disbursements: Februarypayment of $20,000 for land

The company expects its cash balance on January 1, 2021, to be $49,000. It wants to maintain a minimum cash balance of $40,000.

Prepare a cash budget for January and February using columns for each month.

LORCH COMPANY Cash Budget For the Two Months Ending February 28, 2021
		Jan		Feb		Total
Beginning cash balance		$		$		$
Add: Cash receipts
RepaymentDirect labourPurchase of landInterest expensesProceeds from sale of securitiesDirect materialsSelling and administrative expensesCollection of notes receivableCollection from credit salesBorrowingManufacturing overhead
Interest expensesCollection of notes receivableDirect labourRepaymentProceeds from sale of securitiesCollection from credit salesBorrowingSelling and administrative expensesManufacturing overheadDirect materialsPurchase of land
Purchase of landSelling and administrative expensesInterest expensesProceeds from sale of securitiesDirect materialsCollection of notes receivableBorrowingRepaymentManufacturing overheadCollection from credit salesDirect labour
Total receipts
Total available cash
Less: Disbursements
Direct labourSelling and administrative expensesInterest expensesCollection from credit salesProceeds from sale of securitiesCollection of notes receivableDirect materialsPurchase of landRepaymentBorrowingManufacturing overhead
Purchase of landCollection from credit salesBorrowingSelling and administrative expensesCollection of notes receivableDirect materialsRepaymentManufacturing overheadProceeds from sale of securitiesInterest expensesDirect labour
Purchase of landSelling and administrative expensesBorrowingRepaymentCollection of notes receivableProceeds from sale of securitiesDirect materialsCollection from credit salesInterest expensesDirect labourManufacturing overhead
Manufacturing overheadDirect materialsPurchase of landBorrowingSelling and administrative expensesCollection of notes receivableRepaymentInterest expensesDirect labourCollection from credit salesProceeds from sale of securities
Proceeds from sale of securitiesDirect materialsDirect labourInterest expensesSelling and administrative expensesCollection from credit salesCollection of notes receivableRepaymentManufacturing overheadBorrowingPurchase of land
Total disbursements
Excess of cash available over cash disbursements
Financing:
Borrowing
AddLess: Purchase of landProceeds from sale of securitiesInterest expensesSelling and administrative expensesCollection from credit salesBorrowingRepaymentCollection of notes receivableDirect materialsDirect labourManufacturing overhead
AddLess: Selling and administrative expensesPurchase of landDirect materialsCollection from credit salesRepaymentProceeds from sale of securitiesInterest expensesManufacturing overheadCollection of notes receivableDirect labourBorrowing
Total financing
Ending cash balance		$		$		$