Esquire Products Inc. expects the following monthly sales:

January	$	47,000	July	$	41,000
February		38,000	August		45,000
March		31,000	September		48,000
April		33,000	October		53,000
May		27,000	November		61,000
June		25,000	December		43,000
Total sales = $492,000

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 31,000 units. b. Prepare a cash receipts schedule for January through December. Assume that dollar sales in the prior December were $20,000.

Sales

Cash receipts

Case 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 $9,300 per month.

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.)

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.