This is a comprehensive problem all contained on this spreadsheet tab.
Cash Budget
Below is summary monthly income statement data for Ace Manufacturing Company.

Sales revenue
Direct materials purchases
Direct labor
Manufacturing overhead
Selling and administrative expenses

January
250,000
60,000
88,000
50,000
45,000

February
275,000
70,000
95,000
52,000
46,000

All sales are on account, and history has shown that 40% of sales is expected to be collected in the month of the sale, with 60%
Direct materials are paid 50% in the month of purchase and 50% the following month. All other expenses are paid as incurred.
costs (depreciation has already been eliminated).
Other data:
1. December sales were $230,000.
2. Purchases of direct materials purchased in December were $50,000.
3. The company has interest payments due of $5,000 per month.
4. The cash balance on January 1 was $15,000.
Instructions
A. Prepare schedules for expected collections from customers and expected payments for direct materials purchases.
B. Prepare a cash budget for January and February.

n the month of the sale, with 60% collected the following month.
er expenses are paid as incurred. All costs shown are cash-based

ect materials purchases.