Enright Company expects to have a cash balance of $58,270 on January 1, 2014. These are the relevant monthly budget data for the first two months of 2014.
1. Collections from customers: January $83,270, February $158,270.
2. Payments to suppliers: January $52,270, February $87,270.
3. Wages: January $31,336, February $41,336. Wages are paid in the month they are incurred.
4. Administrative expenses: January $22,336, February $25,336. These costs include depreciation of $1,000 per month. All other costs are paid as incurred.
5. Selling expenses: January $16,336, February $21,336. These costs are exclusive of depreciation. They are paid as incurred.
6. Sales of short-term investments in January are expected to realize $13,336 in cash. Enright has a line of credit at a local bank that enables it to borrow up to $25,000. The company wants to maintain a minimum monthly cash balance of $32,270.
Prepare a cash budget for January and February.