Question

Ayayai Corp. prepares monthly cash budgets. Here are relevant data from operating budgets for 2017. January February Sales $360,700 $401,600 Purchases 120,800 131,300 Salaries 84,200 81,600 Administrative expenses 70,900 73,000 Selling expenses 78,100 86,000 All sales and purchases are on account. Budgeted collections and disbursement data are given below. All other expenses are paid in the month incurred except for administrative expenses, which include $1,000 of depreciation per month. Other data. 1. Collections from customers: January $331,800; February $378,100. 2. Payments for purchases: January $106,100; February $141,100. 3. Other receipts: January: collection of December 31, 2016, notes receivable $18,000; February: proceeds from sale of securities $5,400. 4. Other disbursements: February $12,700 cash dividend. The company’s cash balance on January 1, 2017, is expected to be $47,000. The company wants to maintain a minimum cash balance of $55,410.

Answer 1

                                                              January                       February

Opening Cash Balance                        47000                         290700

Add: Collection from Customer           331800                         378100

     Collection of Notes Receivable     18000

     Proceeds of Sale of Security                                               5400

Less: Payments for Purchases             106100                         141100

         Cash Dividend                                                                   12700

         Cash Balance                             290700                          520400