Eastern Auto Parts Inc. has 50 percent of its sales paid for in cash and 50 percent on credit. All credit accounts are collected 2 months later, (e.g. Credit Sales in February are collected at the end of April). Assume the following sales (forecast): [5 pts] January February March April May June $2,000 $3,000 $4,000 $10,000 $40,000 $20,000

Sales in December of the prior year was $1,000. Complete the table below using the assumptions and instructions in the following steps.

• Assume further that the items are sold for $40 each and that a level production schedule will be used over the next 6 months (from Jan to June). Generate a monthly production schedule.

• Prepare a cash receipt schedule

• Determine the cash payment schedule. Assume the production cost is $20 per item.

Determine the months (if any) for which there the cash balance is below zero (assume we start off with $10000 cash).

Month Cash Balance N/A $10,000 November December January February March April May June Sale dollars $2000 $1,000 $2,000 $3,000 $4,000 $10,000 $40,000 $20,000 Month Cash Balance N/A $10,000 November December January February March April May June Sale dollars $2000 $1,000 $2,000 $3,000 $4,000 $10,000 $40,000 $20,000