Colter Company prepares monthly cash budgets. Relevant data from operating budgets for 2013 are:
January
February
Sales$374850$428400
Direct materials purchases117810139230
Direct labor96390107100
Manufacturing overhead7497080325
Selling and administrative expenses8460992106
All sales are on account. Collections are expected to be 50% in the month of sale 30% in the first month following the sale and 20% in the second month following the sale. Sixty percent (60%) of direct materials purchases are paid in cash in the month of purchase and the balance due is paid in the month following the purchase. All other items above are paid in the month incurred except for selling and administrative expenses that include $1071 of depreciation per month.
Other data:
1.Credit sales: November 2012 $278460; December 2012 $342720.
2.Purchases of direct materials: December 2012 $107100.
3.Other receipts: JanuaryCollection of December 31 2012 notes receivable $16065;
FebruaryProceeds from sale of securities $6426.
4.Other disbursements: FebruaryWithdrawal of $5355 cash for personal use of owner Nick Haniwall.
The companys cash balance on January 1 2013 is expected to be $64260. The company wants to maintain a minimum cash balance of $53550.