Answer:
January February
Beginning Cash Balance 58,050 35,475
Add: Receipts
Collections from Customers 109,650 193,500
Sale of Marketable Securities <u>15,480</u> <u> 0 </u>
Total Receipts <u> 125,130 </u> <u> 193,500</u>
Total Available Cash 183,180 228,975
Less: Disbursements
Direct Materials 64,500 96,750
Direct Labour 38,700 58,050
Manufacturing Overhead 25,155 30,315
Selling and Administrative 19,350 25,800
Total Disbursements <u> 147,705 </u> <u> 210,915</u>
Cash Balance 35,475 18,060
Financing
Add: Borrowings 0 7,740
Less: Repayments <u> 0 </u> <u> 0 </u>
Ending Cash Balance 35,475 25,800
The company wants to maintain a minimum monthly cash balance of $25,800 so in February they will have to borrow;
= 25,800 - 18,060
= $7,740
