Esquire Products Inc. expects the following monthly sales:

January	$	31,000	July		$ 25,000
February		22,000	August		29,000
March		15,000	September		32,000
April		17,000	October		37,000
May		11,000	November		45,000
June		9,000	December		27,000
Total sales = $300,000

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 15,000 units.

Esquire Products Inc.
Production and Inventory Schedule in Units
	Beginning inventory	+	Production		Sales	=	Ending inventory
January	15,000
February
March
April
May
June
July
August
September
October
November
December

b.	Prepare a cash receipts schedule for January through December. Assume that dollar sales in the prior December were $20,000.

Esquire Products Inc.
Cash Receipts Schedule
	January		February		March		April		May		June
Sales	$		$		$		$		$		$
Cash receipts:
Cash sales	$		$		$		$		$		$
Prior month's credit sales
Total cash receipts	$		$		$		$		$		$

Esquire Products Inc.
Cash Receipts Schedule
	July		August		September		October		November		December
Sales	$		$		$		$		$		$
Cash receipts:
Cash sales	$		$		$		$		$		$
Prior month's credit sales
Total cash receipts	$		$		$		$		$		$

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 $7,700 per month.

Esquire Products Inc.
Cash Payments Schedule
Constant Production
	January		February		March		April		May		June
Production cost	$		$		$		$		$		$
Other cash payments
Total cash payments	$		$		$		$		$		$

Esquire Products Inc.
Cash Payments Schedule
Constant Production
	July		August		September		October		November		December
Production cost	$		$		$		$		$		$
Other cash payments
Total cash payments	$		$		$		$		$		$

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. (Leave no cells blank - be certain to enter "0" wherever required. Negative amounts should be indicated by a minus sign.)

Esquire Products Inc.
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	$		$		$		$		$		$

Esquire Products Inc.
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	$		$		$		$		$		$

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
	Cash	Accounts Receivable	Inventory	Total Current Assets
January	$	$	$	$
February
March
April
May
June
July
August
September
October
November
December