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Nunez Company expects to have a cash balance of $44,000 on January 1, 2020. Relevant...

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Accounting

Nunez Company expects to have a cash balance of $44,000 on January 1, 2020. Relevant monthly budget data for the first two months of 2020 are as follows:

1. Collections from customers: January $98,000; February $161,000
2. Payments to suppliers: January $61,000; February $78,000
3. Direct labour: January $32,000; February $46,000. Wages are paid in the month they are incurred.
4. Manufacturing overhead: January $27,000; February $30,000. 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 $9,000 in cash.

Nunez Company has a line of credit at a local bank. It can borrow up to $24,000. The company wants to keep a minimum monthly cash balance of $17,000. Prepare a cash budget for January and February.

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For the Two Months Ending February 29, 2020 Month Jan Feb S

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