Cash sales are 40 percent in a given month, with the remainder going into accounts receivable. All receivables are collected in the month following the
Cash sales are 40 percent in a given month, with the remainder going into accounts receivable. All receivables are collected in the month following the sale. Esquire sells all of its goods for $2 each and produces them for $1 each. Esquire uses level production, and average monthly production is equal to annual production divided by 12.
a. Generate a monthly production and inventory schedule in units. Beginning inventory in January is 12,000 units.
b. Prepare a cash receipts schedule for January through December. Assume that dollar sales in the prior December were $20,000.
c. Prepare a cash payments schedule for January through December. The production costs ($1 per unit produced) are paid for in the month in which they occur. Other cash payments (besides those for production costs) are $7,400 per month.
d. Construct a 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 $3,000, which is also the minimum desired. (Negative amounts should be indicated by a minus sign.)
e. Determine total current assets for each month. Include cash, accounts receivable, and inventory. The accounts receivable for a given month is equal to 60 percent of that month's sales. Inventory is equal to ending inventory (part a) times the cost of $1 per unit.
Esquire Products Inc. expects the following monthly sales: January February March April May June $ 28,eee July 19,800 August 12,000 September 14,000 October 8,000 November 6,eee December Total sales - $264,800 $ 22,880 26, een 29,000 34,000 42,eee 24, 800 Cash sales are 40 percent in a given month, with the remainder going into accounts receivable. All receivables are collected in the month following the sale. Esquire sells all of its goods for $2 each and produces them for $1 each. Esquire uses level production, and average monthly production is equal to annual production divided by 12. a. Generate a monthly production and inventory schedule in units. Beginning inventory in January is 12,000 units. January February March April May June July August September October November December Esquire Products Inc. Production and Inventory Schedule in Units Beginning Inventory Production Sales 12,000 11.000 14,000 9,000 11,000 9,500 10,500 11,000 6,000 15,500 11,000 7,000 19,500 11,000 4,000 26,500 11,000 3,000 34,500 11,000 11,000 34,500 11,000 13,000 32,500 11,000 14,500 29,000 11,000 17,000 23,000 11,000 21.000 13,000 11,000 12,000 Ending Inventory 9,000 10,500 15,500 19 500 26,500 34,500 34,500 32,500 29,000 23,000 13,000 12,000 b. Prepare a cash receipts schedule for January through December. Assume that dollar sales in the prior December were $20.0 Esquire Products Inc. Cash Receipts Schedule February March June May April January Sales Cash receipts Cash sales Prior month's credit sales Total cash receipts 0 D 0 0 S $ $ $ 0 $ Esquire Products Inc. Cash Receipts Schedule August September November December October July Sales Cash receipts Cash sales Prior month's credit sales Total cash receipts S 0 0 $ 0 0 $ $ 0$ $ c. Prepare a cash payments schedule for January through December. The production costs ($1 per unit produced) are paid for in the month in which they occur. Other cash payments (besides those for production costs) are $7,400 per month. Esquire Products Inc. Cash Payments Schedule Constant production January February March April May June Production cost Other cash payments Total cash payments $ 0 S 0 $ 0 $ 0 $ 0 $ 0 Esquire Products Inc. Cash Payments Schedule Constant production August September July October November December Production cost Other cash payments Total cash payments $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 schedule from partc The beginning cash balance is $3,000, which is also the minimum desired. (Negative amounts should be indicated by a minus sign.) Esquire Products Inc. Cash Budget February March June May April January Beginning cash Nel cash flow Cumulative cash balance Monthly loan or (repayment) Ending cash balance Cumulative loan balance Esquire Products Inc. Cash Budget August September July October November December Beginning cash Nel cash flow Cumulative cash balance Monthly loan or (repayment) Ending cash balance Cumulative loan balance e. Determine total current assets for each month. Include cash, accounts receivable, and inventory. The accounts receivable for a given month is equal to 60 percent of that month's sales. Inventory is equal to ending inventory (part a) times the cost of $1 per unit. Esquire Products Inc. Assets Accounts Inventory Receivable Cash Total Current Assets January February March April May June July August September October November December
