1. Project the approximate balance sheet balances Toy World would have in their Cash, Accounts Receivable, Inventory and Notes Payable, Bank accounts if they employed the new level production strategy. Do not consider any changes to other balance sheet accounts that may occur as they will all be relatively immaterial (for example, the Accrued Taxes balance would change since Toy Worlds earnings would change, but the amount is relatively small). HINT Accounts Receivable should not change between the 2 options, but will need to be factored in to correctly project the other items (cash, inventory, notes payable).

Schedule of Inventory Projected 1994 - Level Production FG Completed FG Net Change FG Beg FG End Month COGS January $ 542,500 $ 78,000 $ 464,500 $ 586,000 $ 1,050,500 February $ 542,500 $ 91,000 $ 451,500 $ 1,050,500 $ 1,502,000 March $ 542,500 $ 104,000 $ 438,500 $ 1,502,000 $ 1,940,500 April $ 542,500 $ 91,000 $ 451,500 $ 1,940,500 $ 2,392,000 May $ 542,500 $ 91,000 $ 451,500 $ 2,392,000 $ 2,843,500 June $ 542,500 $ 91,000 $ 451,500 $ 2,843,500 $ 3,295,000 July August September October November December Schedule of Inventory Projected 1994 - Level Production FG Completed FG Net Change FG Beg FG End Month COGS January $ 542,500 $ 78,000 $ 464,500 $ 586,000 $ 1,050,500 February $ 542,500 $ 91,000 $ 451,500 $ 1,050,500 $ 1,502,000 March $ 542,500 $ 104,000 $ 438,500 $ 1,502,000 $ 1,940,500 April $ 542,500 $ 91,000 $ 451,500 $ 1,940,500 $ 2,392,000 May $ 542,500 $ 91,000 $ 451,500 $ 2,392,000 $ 2,843,500 June $ 542,500 $ 91,000 $ 451,500 $ 2,843,500 $ 3,295,000 July August September October November December