This problem continues the Daniels Consulting situation from Problem P20-43 of Chapter 20. Assume Daniels Consulting began January with $12,000 cash. Management forecasts that cash receipts from credit customers will be $52,000 in January and $55,000 in February. Projected cash payments include equipment purchases ($16,000 in January and $40,400 in February) and selling and administrative expenses ($6,000 each month).
Daniels€™s bank requires a $23,000 minimum balance in the firm€™s checking account.
At the end of any month when the account balance falls below $23,000, the bank automatically extends credit to the firm in multiples of $5,000. Daniels borrows as little as possible and pays back loans each month in $1,000 increments, plus 12% interest on the entire unpaid principal. The first payment occurs one month after the loan.
In Problem

Requirements
1. Prepare Daniels Consulting€™s cash budget for January and February 2018.
2. How much cash will Daniels borrow in February if cash receipts from customers that month total $30,000 instead of $55,000?

Budgeted Cost of Activity Predetermined Overhead Allocation Rate Activity Designing Programming Testing Allocation Base $20,000 50,000 25,000 Number of designs Number of direct labor hours Number of tests $1,350 25 500