Assume you have developed and tested a prototype electronic product and are about to start your new business. You purchase preprogrammed computer chips at $55 per unit. Other component costs include plastic casings at $15 per unit and assembly hardware at $10 per unit. Direct labor costs are $25 per hour and three units can be produced per hour. You intend to sell each unit at a 50 percent markup over the total costs of producing each unit. The plan is to produce 500 product units per month in January, 600 in February, and 800 in March. Sales are expected to be 200 units in January, 400 units in February, and 800 units in March.

Required:

a) Prepare inventory schedule for January, February, and March. (5)

b) Calculate the gross profit for the first quarter of the year. (2.5)

c) Calculate the amount of accounts payable and accounts receivable to be reported in balance sheet of the company. (2.5)

d) Prepare Balance sheet of the venture and calculate how much other short term financing is required for the venture? Other data required for balance sheet is mentioned below (5)

Cash 2000

Accrued Liabilities 3000

Fixed Assets 120000

Long term debt 20000

Owner's Equity 40000