Practice Exercise 2

Danner Company expects to have a cash balance of $45,045on January 1, 2017. Relevant monthly budget data for the first 2 months of 2017 are as follows.

Collections from customers: January $85,085, February $150,150.

Payments for direct materials: January $50,050, February $75,075.

Direct labor: January $30,030, February $45,045. Wages are paid in the month they are incurred.

Manufacturing overhead: January $21,021, February $25,025. These costs include depreciation of $1,502per month. All other overhead costs are paid as incurred.

Selling and administrative expenses: January $15,015, February $20,020. These costs are exclusive of depreciation. They are paid as incurred.

Sales of marketable securities in January are expected to realize $12,012in cash. Danner Company has a line of credit at a local bank that enables it to borrow up to $25,025. The company wants to maintain a minimum monthly cash balance of $20,020.

create cash budget for January and February.(Do not leave any answer field blank. Enter "0" for the amounts.)

DANNER COMPANY

Cash Budget

For the Two Months Ending February 28, 2017

February 28, 2017

For the Quarter Ending February 28, 2017