Front Page Video Games - Part Deux Front Page Video Games loves the work you did for them on their Last Spike video game facility so now they want you to do an even more detailed analysis for a second manufacturing facility they are planning to run that will make a completely different game called First Spike. They want you to develop forecasts for 2022 using the following information. Ending Inventory Ending Cash Units Forecast year 2021 Units Produced 2,083 5,000 $ 8,333 4,167 2022 Month November December January February March April May June July August September October November December January Other Cash Sales ($) Payments $ 12,000 24,000 240,000 $ 45,600 150,000 52,800 475,000 55,200 264,000 48,000 288,000 64,800 240,000 62,400 312,000 45,600 264,000 48,000 264,000 48,000 336,000 50,400 312,000 52,800 264,000 48,000 240,000 52,800 2023 Sale price per unit is: $ 22 Cost per unit is: 11 Cash flows for unit costs in any month is the cost per unit times the units produced in the prior month because all unit costs are purchased on account Accounts Payable) in the month produced and paid in full the following month. Similarly, Other Cash Payments in a month are payments regarding other expenses purchased on account in the prior month. Front Page wants to keep its facility running with a level production policy but they realize this might not be entirely realistic. To save capital investment they are purchasing used equipment that will require extensive repairs and maintenance twice a year. This means that in June and December they will only be able to produce a maximum number of units of: 5,000 units First Spike sales are expected to be a mix of direct online cash sales and various distributors. The distributor's sales will all be on account. Cash receipts from distributor sales are expected to be received across the two months following the sale. Front Page expects cash receipts to be approximately: Cash sales 30% A/R from 1 month prior A/R from 2 months prior 30% 70% a. a. Construct a monthly production and inventory schedule in units. Note: To do part a, you should work in terms of units of production and units of sales. b. Prepare a monthly schedule of cash receipts. c. Prepare a monthly schedule of cash payments. d. Prepare a monthly cash budget. To ensure proper liquidity, Front Page use short term loans to maintain a minimum ending cash balance of: $ 39,000 There is no short term liquidity loan balance from 2021 (i.e., opening balance zero) e. Use this additional information to prepare the monthly balance sheet and determine the shareholder equity fluctuations for each month. Property, Plant & Equipment 750,000 Bonds Payable (long term) 450,000 a. Construct a monthly production and inventory schedule in units. Note: To do part a, you should work in terms of units of production and units of sales. Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Production and Inventory Schedule (units) Jan Beginning Inventory Production Less: Sales Ending Inventory b. Prepare a monthly schedule of cash receipts. Cash Receipts Schedule Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Sales 30% Cash sales 70% A/R 1 month prior 30% A/R 2 months prior Total cash receipts c. Prepare a monthly schedule of cash payments. Cash Payments Schedule Jan Feb Mar Apr May Jun Jul Aug Sep| Oct Nov Dec Inventory Other cash payments Total cash payments d. Prepare a monthly cash budget. To ensure proper liquidity, Front Page wants to maintain a minimum ending cash balance of: $ 39,000 Cash Budget Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Net cash flow Beginning cash Cumulative cash balance Monthly loan (repayment) Cumulative loan Ending cash balance e. Use this additional information to prepare the monthly balance sheet and determine the shareholder equity fluctuations for each month. Property, Plant & Equipment $ 750,000 Bonds Payable (long term) 450,000 Balance Sheet Jan Feb Mar Apr May Jun Jul Aug Sep| Oct Nov Dec Cash Accounts Receivable Inventory Total Current Assets PPE Total Assets Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec A/P unit costs A/P other costs Total A/P Short term loans Total Current Liabilities Bonds Payable (long term) Shareholder equity Total Liability and S/E Front Page Video Games - Part Deux Front Page Video Games loves the work you did for them on their Last Spike video game facility so now they want you to do an even more detailed analysis for a second manufacturing facility they are planning to run that will make a completely different game called First Spike. They want you to develop forecasts for 2022 using the following information. Ending Inventory Ending Cash Units Forecast year 2021 Units Produced 2,083 5,000 $ 8,333 4,167 2022 Month November December January February March April May June July August September October November December January Other Cash Sales ($) Payments $ 12,000 24,000 240,000 $ 45,600 150,000 52,800 475,000 55,200 264,000 48,000 288,000 64,800 240,000 62,400 312,000 45,600 264,000 48,000 264,000 48,000 336,000 50,400 312,000 52,800 264,000 48,000 240,000 52,800 2023 Sale price per unit is: $ 22 Cost per unit is: 11 Cash flows for unit costs in any month is the cost per unit times the units produced in the prior month because all unit costs are purchased on account Accounts Payable) in the month produced and paid in full the following month. Similarly, Other Cash Payments in a month are payments regarding other expenses purchased on account in the prior month. Front Page wants to keep its facility running with a level production policy but they realize this might not be entirely realistic. To save capital investment they are purchasing used equipment that will require extensive repairs and maintenance twice a year. This means that in June and December they will only be able to produce a maximum number of units of: 5,000 units First Spike sales are expected to be a mix of direct online cash sales and various distributors. The distributor's sales will all be on account. Cash receipts from distributor sales are expected to be received across the two months following the sale. Front Page expects cash receipts to be approximately: Cash sales 30% A/R from 1 month prior A/R from 2 months prior 30% 70% a. a. Construct a monthly production and inventory schedule in units. Note: To do part a, you should work in terms of units of production and units of sales. b. Prepare a monthly schedule of cash receipts. c. Prepare a monthly schedule of cash payments. d. Prepare a monthly cash budget. To ensure proper liquidity, Front Page use short term loans to maintain a minimum ending cash balance of: $ 39,000 There is no short term liquidity loan balance from 2021 (i.e., opening balance zero) e. Use this additional information to prepare the monthly balance sheet and determine the shareholder equity fluctuations for each month. Property, Plant & Equipment 750,000 Bonds Payable (long term) 450,000 a. Construct a monthly production and inventory schedule in units. Note: To do part a, you should work in terms of units of production and units of sales. Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Production and Inventory Schedule (units) Jan Beginning Inventory Production Less: Sales Ending Inventory b. Prepare a monthly schedule of cash receipts. Cash Receipts Schedule Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Sales 30% Cash sales 70% A/R 1 month prior 30% A/R 2 months prior Total cash receipts c. Prepare a monthly schedule of cash payments. Cash Payments Schedule Jan Feb Mar Apr May Jun Jul Aug Sep| Oct Nov Dec Inventory Other cash payments Total cash payments d. Prepare a monthly cash budget. To ensure proper liquidity, Front Page wants to maintain a minimum ending cash balance of: $ 39,000 Cash Budget Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Net cash flow Beginning cash Cumulative cash balance Monthly loan (repayment) Cumulative loan Ending cash balance e. Use this additional information to prepare the monthly balance sheet and determine the shareholder equity fluctuations for each month. Property, Plant & Equipment $ 750,000 Bonds Payable (long term) 450,000 Balance Sheet Jan Feb Mar Apr May Jun Jul Aug Sep| Oct Nov Dec Cash Accounts Receivable Inventory Total Current Assets PPE Total Assets Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec A/P unit costs A/P other costs Total A/P Short term loans Total Current Liabilities Bonds Payable (long term) Shareholder equity Total Liability and S/E