Answer Happy

Yancey has $12,500 in cash on hand on January 1 and has collected the following budget data: (Click on the icon to view the budget data.) Assume direct labor costs and manufacturing overhead costs are paid in the month incurred. Additionally, assume Yancey has cash payments for selling and administrative expenses including salaries of $40,000 per month plus commissions that are 2% of sales, all paid in the month of sale. The company requires a minimum cash balance of $20,000. Prepare a cash budget for January and February. Round to the nearest dollar. Will Yancey need to borrow cash by the end of February?
Beginning cash balance Cash receipts Cash available Cash payments: Purchases of direct materials Direct labor Manufacturing overhead Selling and administrative expenses Total cash payments Ending cash balance before financing Minimum cash balance desired Projected cash excess (defi ciency) Financing: Borrowing Principal repayments Total effects of financing Ending cash balance $ 12,500 442,700 455,200 180,526 135,010 54,148 50,600 420,284 (20,000) 0 0
Data table Sales Cash receipts from customers Cash payments for direct materials purchases Direct labor costs Manufacturing overhead costs (includes depreciation of $1,100 per month) Print Done January February $ 530,000 $ 570,000 442,700 503,000 180,526 160,752 135,010 112,876 55,248 53,016 - X