12.2

b. Prepare a monthly schedule of cash receipts. Sales in December before the planning year are $100,000. Bombs Away Video Games Corporation Cash Receipts Schedule January February March April May June Sales Cash receipts Cash sales Prior month's credit sales Total cash receipts Bombs Away Video Games Corporation Cash Receipts Schedule August September July October November December Sales Cash receipts Cash sales Prior month's credit sales Total cash receipts Bombs Away Video Games Corporation has forecasted the following monthly sales 102,000 July January February March April May 95,000 August 27,000 September 27.000 October 22,000 November 37.000 December S 47,000 47,000 57,000 87,000 107,000 125,000 ne Total annual sales-$780,000 Bombs Away Video Games sells the popular Strafe and Capture video game. It sells for $5 per unit and costs $2 per unit to produce. A level production policy is followed. Each month's production is equal to annual sales (in units) divided by 12 of each month's sales, 20 percent are for cash and 80 percent are on account. All accounts receivable are collected in the month after the sale is made a. Construct a monthly production and inventory schedule in units. Beginning inventory in January is 27,000 units c. Prepare a cash payments schedule for January through December. The production costs of $2 per unit are paid for in the month in which they occur. Other cash payments, besides those for production costs, are $47,000 per month Bombs Away Video Games Corporation Cash Payments Schedule January February March April May June Production cost Other cash payments Total cash payments Bombs Away Video Games Corporation Cash Payments Schedule July August September October November December Production cost Other cash payments Total cash payments d. Prepare a monthly cash budget for January through December using the cash receipts schedule from part b and the cash payments schedule from part c. The beginning cash balance is $5,000 which is also the minimum desired. (Negative amounts should be indicated by a minus sign.) Bombs Away Video Games Corporation Cash Budget January February March April May June Beginning cash Net cash flow Cumulative cash balance Monthly loan or (repayment) Ending cash balance Cumulative loan balance Bombs Away Video Games Corporation Cash Budget July August September October November December Beginning cash Net cash flow Cumulative cash balance Monthly loan or (repayment) Ending cash balance Cumulative loan balance b. Prepare a monthly schedule of cash receipts. Sales in December before the planning year are $100,000. Bombs Away Video Games Corporation Cash Receipts Schedule January February March April May June Sales Cash receipts Cash sales Prior month's credit sales Total cash receipts Bombs Away Video Games Corporation Cash Receipts Schedule August September July October November December Sales Cash receipts Cash sales Prior month's credit sales Total cash receipts Bombs Away Video Games Corporation has forecasted the following monthly sales 102,000 July January February March April May 95,000 August 27,000 September 27.000 October 22,000 November 37.000 December S 47,000 47,000 57,000 87,000 107,000 125,000 ne Total annual sales-$780,000 Bombs Away Video Games sells the popular Strafe and Capture video game. It sells for $5 per unit and costs $2 per unit to produce. A level production policy is followed. Each month's production is equal to annual sales (in units) divided by 12 of each month's sales, 20 percent are for cash and 80 percent are on account. All accounts receivable are collected in the month after the sale is made a. Construct a monthly production and inventory schedule in units. Beginning inventory in January is 27,000 units c. Prepare a cash payments schedule for January through December. The production costs of $2 per unit are paid for in the month in which they occur. Other cash payments, besides those for production costs, are $47,000 per month Bombs Away Video Games Corporation Cash Payments Schedule January February March April May June Production cost Other cash payments Total cash payments Bombs Away Video Games Corporation Cash Payments Schedule July August September October November December Production cost Other cash payments Total cash payments d. Prepare a monthly cash budget for January through December using the cash receipts schedule from part b and the cash payments schedule from part c. The beginning cash balance is $5,000 which is also the minimum desired. (Negative amounts should be indicated by a minus sign.) Bombs Away Video Games Corporation Cash Budget January February March April May June Beginning cash Net cash flow Cumulative cash balance Monthly loan or (repayment) Ending cash balance Cumulative loan balance Bombs Away Video Games Corporation Cash Budget July August September October November December Beginning cash Net cash flow Cumulative cash balance Monthly loan or (repayment) Ending cash balance Cumulative loan balance