Nadia Company expects to have a cash balance of $45,400 on January 1, 2020. Nadia has budgeted the following for the first two months of the year 2020:
1. Collections from customers: January $89,800; February $109,400. 2. Payments to suppliers: January $39,700; February $49,900. 3. Direct labour: January $30,000; February $35,200. Wages are paid in the month they are incurred. 4. Manufacturing overhead: January $24,800; February $30,300. Overhead costs are paid as incurred. 5. Selling and administrative expenses: January $15,800; February $22,000. These costs do not include depreciation and they are paid as incurred. 6. Sales of investments in January are expected to realize $10,000 in cash. Nadia Company wants to keep a minimum monthly cash balance of $20,000.
Prepare a cash budget for January and February.