Esquire Products Inc. expects the following monthly sales:

January	$	29,000	July	$	23,000
February		20,000	August		27,000
March		13,000	September		30,000
April		15,000	October		35,000
May		9,000	November		43,000
June		7,000	December		25,000
Total sales = $276,000

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 13,000 units.

Esquire Products Inc.
Production and Inventory Schedule in Units
	Beginning Inventory	+	Production		Sales	=	Ending Inventory
January	13,000
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 $7,500 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. (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