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prepare a cash budget for January and February

11 Blue Spruce Company expects to have a cash balance of $46,000 on January 1, 2022. Relevant monthly budget data for the first two months of 2022 are as follows: 1. Collections from customers: January $100,000; February $159,000 2. Payments to suppliers: January $59,000; February $78,000 3. Direct labour: January $31,000; February $46,000. Wages are paid in the month they are incurred. 4. Manufacturing overhead: January $28,000; 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 $16,000; February $21,000. These costs are exclusive of depreciation. They are paid as incurred. 6. Sales of marketable securities in January are expected to realize $11,000 in cash. Blue Spruce 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 $24,000. Prepare a cash budget for January and February. BLUE SPRUCE COMPANY Cash Budget For the Two Months Ending February 28, 2022 Month Jan Feb Beginning cash balance TA 46000 $ 24000 Add Cash receipts Collection from customers 100000 159000 Sale of marketable securities 11000 0 111000 159000 Total receipts Total available cash 157000 183000 Less Disbursements Direct materials Direct labour Manufacturing overhead Selling and administrative expenses Total disbursements 133000 174000 Excess of available cash over cash disbursements Selling and administrative expenses Total disbursements 133000 174000 Excess of available cash over cash disbursements Financing Borrowing Repayment 15000 Ending cash balance $ 24000 $ 24000 BLUE SPRUCE COMPANY Cash Budget For the Two Months Ending February 28, 2022 Month Jan Feb Total $ 46000 $ 24000 $ 100000 159000 11000 0 111000 159000 183000 S 133000 174000 disbursements

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