austin corporation prepares monthly cash budgets here are relev 269691

Austin Corporation prepares monthly cash budgets. Here are relevant data from operating budgets for 2012.

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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 $326,000; February $378,000.

2. Payments for purchases: January $110,000; February $135,000.

3. Other receipts: January: collection of December 31, 2011, notes receivable $15,000;

February: proceeds from sale of securities $4,000.

4. Other disbursements: February $10,000 cash dividend.

The company’s cash balance on January 1, 2012, is expected to be $46,000. The company wants to maintain a minimum cash balance of $40,000.

Instructions

Prepare a cash budget for January and February