Danner Company expects to have a cash balance of $64,216 on January 1, 2014. Relevant monthly budget data for the first 2 months of 2014 are as follows. Collections Collections from customers: January $118,660, February $209,400. Payments for direct materlals: January $69,800, February $97,720 ufacturind anuary $41.685: January se 560, Febru Selling and adminlstrative expenses: January $20,940, February $27,920. These costs are exclusive of depreciation. They are pald as Incurred e36 per DIrect labor: January $41,880, February $62,820. Wages are pald in the month they are Incurred. Manufacturing overhead: January $29,316, February $34,900. These costs Include of $1,396 per month. All other overhead costs are pald as Incurred. are pald as depreciation month. All rhead cos Sales of marketable securitles In January are expected to realize $13,960 In cash. Danner Company has a line of credit at a local bank that enables it to borrow up to $34,900. The company wants to malntaln a minlmum monthly cash balance of $27,920. securities at enables t to borrow monthly ca bank that maintaln a a minimum Prepare a cash budget for January and February DANNER COMPANY Cash Budget For the Two Months Ending February 28, 2014 Jan Solution Statement showing cash budget for January and February Particulars January February Opening Balance                          64,216.00                         36,296.00 Collections from customers                        118,660.00                       209,400.00 Payment for Direct Materials                        (69,800.00)                       (97,720.00) Direct Labour                        (41,880.00)                       (62,820.00) Manufacturing Overhead excluding depreciation since depr is non cash expense                        (27,920.00)                       (33,504.00) Selling and admin exp                        (20,940.00)                       (27,920.00) Sales of Marketable securities                          13,960.00                                         -   Closing bal before adj                          36,296.00                         23,732.00 Minimum Balance required                          27,920.00                         27,920.00 Loan taken                                          -                              4,188.00 Balance at end                          36,296.00                         27,920.00 .

1. Danner Company expects to have a cash balance of $64,216 on January 1, 2014. Relevant
monthly budget data for the first 2 months of 2014 are as follows. Collections Collections from
customers: January $118,660, February $209,400. Payments for direct materlals: January
$69,800, February $97,720 ufacturind anuary $41.685: January se 560, Febru Selling and
adminlstrative expenses: January $20,940, February $27,920. These costs are exclusive of
depreciation. They are pald as Incurred e36 per DIrect labor: January $41,880, February $62,820.
Wages are pald in the month they are Incurred. Manufacturing overhead: January $29,316,
February $34,900. These costs Include of $1,396 per month. All other overhead costs are pald as
Incurred. are pald as depreciation month. All rhead cos Sales of marketable securitles In January
are expected to realize $13,960 In cash. Danner Company has a line of credit at a local bank that
enables it to borrow up to $34,900. The company wants to malntaln a minlmum monthly cash
balance of $27,920. securities at enables t to borrow monthly ca bank that maintaln a a minimum
Prepare a cash budget for January and February DANNER COMPANY Cash Budget For the
Two Months Ending February 28, 2014 Jan
Solution
Statement showing cash budget for January and February Particulars January February Opening
Balance                         64,216.00
                       36,296.00 Collections from customers
                      118,660.00
                     209,400.00 Payment for Direct Materials
                      (69,800.00)
                     (97,720.00) Direct Labour
                      (41,880.00)
                     (62,820.00) Manufacturing Overhead
excluding depreciation since depr is non cash expense
                      (27,920.00)
                     (33,504.00) Selling and admin exp
                      (20,940.00)
                     (27,920.00) Sales of Marketable securities
                        13,960.00
                                       -
  Closing bal before adj                         36,296.00
                       23,732.00 Minimum Balance required
                        27,920.00

2. Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 27,920.00 Loan taken
                                       Â
-Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 4,188.00 Balance at end
                        36,296.00
                       27,920.00