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Esquire Products, Inc., expects the following...

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Esquire Products, Inc., expects the following monthly sales: January $ 43,000 July $ 37,000 February 34,000 August 41,000 March 27,000 September 44,000 April 29,000 October 49,000 May 23,000 November 57,000 June 21,000 December 39,000 Total sales = $444,000 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 27,000 units. ESQUIRE PRODUCTS, INC. Production and inventory schedule in units Beginning inventory + Production ? Sales = Ending inventory January 27,000 + ? = February + ? = March + ? = April + ? = May + ? = June + ? = July + ? = August + ? = September + ? = October + ? = November + ? = December + ? = (b) Determine a cash receipts schedule for January through December. Assume that dollar sales in the prior December were $20,000. (Omit the "$" sign in your response.) ESQUIRE PRODUCTS, INC. Cash Receipts Schedule January February March April May June Sales $ $ $ $ $ $ Cash sales Prior month?s sales Total cash receipts $ $ $ $ $ $ ESQUIRE PRODUCTS, INC. Cash Receipts Schedule July August September October November December Sales $ $ $ $ $ $ Cash sales Prior month?s sales Total cash receipts $ $ $ $ $ $ (c) Determine 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 $8,900 per month. (Omit the "$" sign in your response.) 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 $3,000, which is also the minimum desired. (Leave no cells blank - be certain to enter "0" wherever required. Negative amounts should be indicated by a minus sign. Omit the "$" sign in your response.) ESQUIRE PRODUCTS, INC. Cash Budget January February March April May June Net cash flow $ $ $ $ $ $ Beginning cash Cumulative cash balance $ $ $ $ $ $ Monthly loan or (repayment) Cumulative loan Ending cash balance $ $ $ $ $ $ ESQUIRE PRODUCTS, INC. Cash Budget July August September October November December Net cash flow $ $ $ $ $ $ Beginning cash Cumulative cash balance $ $ $ $ $ $ Monthly loan or (repayment) Cumulative loan Ending cash balance $ $ $ $ $ $ (e) Determine total current assets for each month. Include cash, accounts receivable, and inventory. Accounts receivable equal sales minus 40 percent of sales for a given month. Inventory is equal to ending inventory (part a) times the cost of $1 per unit. (Omit the "$" sign in your response.) ESQUIRE PRODUCTS, INC. Assets Cash Accounts Receivable Inventory Total Current January $ $ $ $ February March April May June July August September October November December

 

Paper#2661 | Written in 18-Jul-2015

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