Calydon Corporation manufactures and distributes wooden baseball bats. This is a seasonal business with a large portion of its sales occurring in late winter and early spring. The production schedule for the last quarter of the year is heavy in order to build up inventory to meet expected sales volume.
The company experiences a temporary cash strain during this heavy production period. Pay- roll costs rise during the last quarter because overtime is scheduled to meet the increased production needs. Collections from customers are low because the fall season produces only modest sales. This year, the company's concern is intensified because prices are increasing during the current inflationary period. In addition, the sales department forecasts sales of fewer than 1 mil- lion bats for the first time in 3 years. This decrease in sales appears to be caused by the popularity of aluminum bats.
The cash account builds up during the first and second quarters as sales exceed production. The excess cash is invested in treasury bills and other commercial paper. During the last half of the year, the temporary investments are liquidated to meet the cash needs. In the early years of the company, short-term borrowing was used to supplement the funds released by selling investments, but this has not been necessary in recent years. Because costs are higher this year, the treasurer asks for a forecast for December to judge if the $40,000 in temporary investments will be adequate to carry the company through the month with a minimum balance of $10,000. Should this amount ($40,000) be insufficient, she wants to begin negotiations for a short-term loan.
The unit sales volume for the past two months and the estimate for the next four months are:
October (actual) .................................. 70,000
November (actual) ............................... 50,000
December (estimated) ........................... 50,000
January (estimated) ............................... 90,000
February (estimated) .............................. 90,000
March (estimated) ............................... 120,000
The bats are sold for $5 each. All sales are made on account. Half of the accounts are collected in the month of the sale, 40 percent are collected in the month following the sale, and the remaining 10 percent in the second month following the sale. Customers who pay in the month of the sale receive a 2 percent cash discount.
The production schedule for the six-month period beginning with October reflects the company's policy of maintaining a stable year-round workforce by scheduling overtime to meet the following production schedules:
October (actual) .................................. 90,000
November (actual) ............................... 90,000
December (estimated) ........................... 90,000
January (estimated) ............................... 90,000
February (estimated) .............................. 100,000
March (estimated) ............................... 100,000
The bats are made from wooden blocks that cost $6 each. Ten bats can be produced from each block. The blocks are acquired one year in advance so they can be properly aged. Calydon pays the supplier one-twelfth of the cost of this material each month until the obligation is retired. The monthly payment is $60,000.
The plant is normally scheduled for a 40-hour, five-day work week. During the busy production season, however, the work week may be increased to six 10-hour days. Workers can pro- duce 7.5 bats per hour. Normal monthly output is 75,000 bats. Factory employees are paid $15 per hour for regular time and time and one-half for overtime.
Other manufacturing costs include variable overhead of $0.30 per unit and annual fixed overhead of $280,000. Depreciation charges totalling $40,000 are included among the fixed overhead. Selling expenses include variable costs of $0.20 per unit and annual fixed costs of $60,000. Fixed administrative costs are $120,000 annually. All fixed costs are incurred uniformly throughout the year.
The controller has accumulated the following additional information:
a. The balances of selected accounts as at November 30, 2015, are:

b. Interest to be received from the company's temporary investments is estimated at $500 for December.
c. Prepaid expenses of $3,600 will expire during December and the balance of the prepaid account is estimated at $4,200 for the end of December.
d. Calydon purchased new machinery in 2015 as part of a plant modernization program. The machinery was financed by a 24-month note of $144,000. The terms call for equal principal payments over the next 24 months with interest paid at the rate of 1 percent per month on the unpaid balance at the first of the month. The first payment was made on May 1, 2015.
e. Old equipment, which has a book value of $8,000, is to be sold during December for $7,500.
f. Each month the company accrues $1,700 for vacation pay by charging vacation pay expense and crediting accrued vacation pay. The plant closes for two weeks in June when all plant employees take a vacation.
g. Quarterly dividends of $0.20 per share will be paid on December 15 to shareholders of record.
Calydon Corporation has authorized 10,000 shares. The company has issued 7,000 shares.
h. The quarterly income taxes payment of $50,000 is due on December 15, 2015.
Required:
Prepare a schedule that forecasts the cash position at December 31, 2015. What action, if any, will be required to maintain a $10,000 cash balance?

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Cash S 12,000 Marketable securities, at market value Accounts receivable Prepaid expenses Accounts payable (arising from raw material purchases) Accrued vacation pay Equipment note payable Accrued income taxes payable 96,000 4,800 300,000 9,500 102,000 50,000