Esquire Products Inc. expects the following monthly sales:

January$34,000July$ 28,000February25,000August32,000March18,000September35,000April20,000October40,000May14,000November48,000June12,000December30,000Total sales = $336,000

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 18,000 units.

Esquire Products Inc.Production and Inventory Schedule in UnitsBeginning

inventory+ProductionSales=Ending

inventoryJanuary18,000FebruaryMarchAprilMayJuneJulyAugustSeptemberOctoberNovemberDecember

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 ScheduleJanuaryFebruaryMarchAprilMayJuneSales$$$$$$Cash receipts:Cash sales$$$$$$Prior month's credit salesTotal cash receipts$$$$$$

Esquire Products Inc.Cash Receipts ScheduleJulyAugustSeptemberOctoberNovemberDecemberSales$$$$$$Cash receipts:Cash sales$$$$$$Prior month's credit salesTotal cash receipts$$$$$$

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 $8,000 per month.

Esquire Products Inc.Cash Payments ScheduleConstant ProductionJanuaryFebruaryMarchAprilMayJuneProduction cost$$$$$$Other cash paymentsTotal cash payments$$$$$$

Esquire Products Inc.Cash Payments ScheduleConstant ProductionJulyAugustSeptemberOctoberNovemberDecemberProduction cost$$$$$$Other cash paymentsTotal cash payments$$$$$$

d.

Construct a cash budget for January through December using the cash receipts schedule from partband the cash payments schedule from partc. 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 BudgetJanuaryFebruaryMarchAprilMayJuneBeginning cash$$$$$$Net cash flowCumulative cash balance$$$$$$Monthly loan or (repayment)Ending cash balance$$$$$$Cumulative loan balance$$$$$$

Esquire Products Inc.Cash BudgetJulyAugustSeptemberOctoberNovemberDecemberBeginning cash$$$$$$Net cash flowCumulative cash balance$$$$$$Monthly loan or (repayment)Ending cash balance$$$$$$Cumulative loan balance$$$$$$

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 (parta) times the cost of $1 per unit.

Esquire Products Inc.AssetsCashAccounts ReceivableInventoryTotal Current AssetsJanuary$$$$FebruaryMarchAprilMayJuneJulyAugustSeptemberOctoberNovemberDecember