Amazon Wood Products, Inc. is a manufacturer of fine quality tables, chairs, and desks. The following information relates to expected production, sales, and other costs for next year (ended December 31, 20xx).

Forecasted annual sales in units for the year are: Tables 200, Chairs          1,200, Desks      180

Amazon expects to sell 5% of the total annual forecasted sales of tables and chairs during January through August. During September through December, the company expects to sell 15% of the total annual forecasted sales of tables and chairs. Desks are expected to sell evenly throughout the year.

The current selling prices per unit are as follows:

Tables   $1,200  Chairs    150         Desks    900

Management expects to increase the selling prices for tables and chairs by 6% at the beginning of September.

The current costs of production per unit are as follows:

Direct Materials:

Tables   $ 360     Chairs    40           Desks    340

Direct Labour:

Tables   $ 420     Chairs    50           Desks    300

 Direct material costs for desks are expected to increase by 5% at the beginning of May.

The unit production schedule for the year is as follows:

 Tables and Chairs: 

7.5% of total estimated sales in each month during January through June 

10% of total estimated sales in each month during July through November

5% of total estimated sales during December

 Desks:

Total estimated sales are to be produced evenly over the year in every second month, starting in January

 Other expenditures and costs are expected to be as follows:

 Rent $3,400 per month                                                                                

Utilities $250 per month

Clerk’s annual salary including employer share of CPP and EI: $18,000

Telephone and Internet access $90 per month

Insurance for the year of $3,000, paid monthly in equal installments

Business taxes of $200 per month are expected to be paid monthly during January through June. Taxes are expected to increase by 5% effective July 1.

Office supplies of $450 purchased during April and another $450 during November

Annual salary $54,000 for the shareholder/manager (not included in labour costs above)

Estimated capital expenditures to be purchased in February are as follows:

 New computer                 $  3,500                 Lathe                     18,000   Other miscellaneous tools            12,000

The existing computer is expected to be sold in March at a selling price of $550.

 Income taxes are estimated to be 21% of taxable income and are paid quarterly at the end of March, June, September, and December. The company expects a Capital Cost Allowance (CCA) of $7,500 for the year.

 At the beginning of the year, the cash balance is expected to be $3,000, and the company is forecasted to have no accounts receivable, inventory, accounts payable, or salaries/wages payable.

Requirement:

prepare the monthly cash forecast of the amazon wood products