Question: Bastille Corporation prepares monthly cash budgets. Here are relevant data from operating budgets for 2017.
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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. Administrative expenses 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, 2016, 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, 2017, is expected to be $46,000. The company wants to maintain a minimum cash balance of $40,000.