Question - Nunez Company expects to have a cash balance of $45,000 on January 1, 2016. Relevant monthly budget data for the first two months of 2016 are as follows:

1. Collections from customers:

January $100,000;

February $160,0002.

2. Payments to suppliers:

January $60,000;

February $80,0003.

3. Direct labour:

January $30,000;

February $45,000.

Wages are paid in the month they are incurred.

4. Manufacturing overhead: January $26,000; February $31,000. These costs include depreciation of $1,000 per month. All other overhead costs are paid as incurred.

5. Selling and administrative expenses: January $15,000; February $20,000. These costs are exclusive of depreciation. They are paid as incurred.

6. Sales of marketable securities in January are expected to realize $10,000 in cash.

Nunez Company has a line of credit at a local bank. It can borrow up to $25,000. The company wants to keep a minimum monthly cash balance of $25,000.

Need a cash budget for January and February.