prepare a cash budget by quarters for the s x months ending june 30 2014 618765

The Crawford Company begins operations with a cash balance of 360,000 on January 1. 2014. Relevant quarterly budgeted data pertaining to a cash budget for the first two quarters of the year are as follows:

Sales: (1)$140.000. (2) $250,000. All sales are on account: 60% of the sales are expected to be collected in cash -n the period of sale, and the bafance n the following quarter.

Direct materials purchases: (1) $65.000. (2) $165.000. 40% of each purchase is paid in cash at the time of the purchase. and the balance is paid in the following quarter.

Direct labor: (1) $40.000, (2) 550,000. Wages are paid at the time they are incurred.

Manufacturng overhead: (1) $35.000, (2) 530,000. These costs induce deprecation of $3.200 per quarter. All cash overhead costs are paid as incurred.

Selling and administrative expenses: (1) $18,000. (2) 519,000. These expenses include 51,000 of depreciation per quarter. All cash selling and administrative costs are paid when incurred.

The company has a line of credit at a local bank that enables it to borrow up to $30.000 per quarter. Interest on any loans and income taxes may be ignored.

The Crawford Company wants to maintain a minimum quarterly cash balance of $40,000.

Instructions

1. Prepare schedules for (1) expected collections from customers and (2) expected payments for direct materials purchases.
2. Prepare a cash budget by quarters for the s x months ending June 30. 2014.