Lily Company prepares monthly cash budgets. Relevant data from operating budgets for 2022 are as follows. Sales Direct materials purchases Direct labor Manufacturing overhead Selling and administrative expenses Other data: 1. 2. 3. January $302,400 4. 100,800 75,600 58,800 66,360 All sales are on account. Collections are expected to be 50% in the month of sale, 30% in the first month following the sale, and 20% in the second month following the sale. Sixty percent (60%) of direct materials purchases are paid in cash in the month of purchase, and the balance due is paid in the month following the purchase. All other items above are paid in the month incurred except for selling and administrative expenses that include $840 of depreciation per month. February $336,000 105,000 84,000 63,000 71,400 Credit sales: November 2021, $210,000; December 2021, $268,800. Purchases of direct materials: December 2021, $84,000. Other receipts: January-Collection of December 31, 2021, notes receivable $12,600; February-Proceeds from sale of securities $5,040. Other disbursements: February-Payment of $5,040 cash dividend. The company's cash balance on January 1, 2022, is expected to be $50,400. The company wants to maintain a minimum cash balance of $42.000

A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It…

A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future…