Question

In: Accounting

Esquire Products Inc. expects the following monthly sales: January $ 44,000 July $ 38,000 February 35,000...

Esquire Products Inc. expects the following monthly sales: January $ 44,000 July $ 38,000 February 35,000 August 42,000 March 28,000 September 45,000 April 30,000 October 50,000 May 24,000 November 58,000 June 22,000 December 40,000 Total sales = $456,000 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 28,000 units.

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

SALE

CASH RECEIPTS

CASH SALES

PRIOR MONTH CREDIT SALES

TOTAL CASH RECEPTS

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 $9,000 per month.

PRODUCTION COST

OTHER CASH PAYMENT

TOTAL CASH PAYMENT

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.

BEGINNING CASH

NET CASH FLOW

CUMULATIVE CASH BALANCE

MONTLY 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.

Expert Solution

First 4 parts have been answered:

Part a:

Sales	January	February	March	April	May	June	July	August	September	October	November	December	Total profucyion
Units	22000	17500	14000	15000	12000	11000	19000	21000	22500	25000	29000	20000	228000

Total production	228000
Monthly production	19000

Months	January	February	March	April	May	June	July	August	September	October	November	December

Opening inventory	28000	28000	28000	28000	28000	28000	28000	28000	28000	28000	28000	28000
Add: Units produced	22000	17500	14000	15000	12000	11000	19000	21000	22500	25000	29000	20000
	50000	45500	42000	43000	40000	39000	47000	49000	50500	53000	57000	48000
Less: sale	22000	17500	14000	15000	12000	11000	19000	21000	22500	25000	29000	20000
Closing inventory	28000	28000	28000	28000	28000	28000	28000	28000	28000	28000	28000	28000

Part b:

Months	January	February	March	April	May	June	July	August	September	October	November	December
Sales	44000	35000	28000	30000	24000	22000	38000	42000	45000	50000	58000	40000

Cash sales@ 40%	17600	14000	11200	12000	9600	8800	15200	16800	18000	20000	23200	16000
Cash received for prior month credit sales	12000	26400	21000	16800	18000	14400	13200	22800	25200	27000	30000	34800
Total cash receipts	29600	40400	32200	28800	27600	23200	28400	39600	43200	47000	53200	50800

Part c:
Months	January	February	March	April	May	June	July	August	September	October	November	December
Monthly production cost paid	22000	17500	14000	15000	12000	11000	19000	21000	22500	25000	29000	20000
Other cash payments	9000	9000	9000	9000	9000	9000	9000	9000	9000	9000	9000	9000
Total cash payment	31000	26500	23000	24000	21000	20000	28000	30000	31500	34000	38000	29000

Part d:
Months	January	February	March	April	May	June	July	August	September	October	November	December
Opening cash balance	3000	1600	15500	24700	29500	36100	39300	39700	49300	61000	74000	89200
Add: Total cash receipts	29600	40400	32200	28800	27600	23200	28400	39600	43200	47000	53200	50800
	32600	42000	47700	53500	57100	59300	67700	79300	92500	108000	127200	140000
Less: Total cash payment	31000	26500	23000	24000	21000	20000	28000	30000	31500	34000	38000	29000
Closing cash balance	1600	15500	24700	29500	36100	39300	39700	49300	61000	74000	89200	111000

ekkarill92 answered 2 years ago

Esquire Products Inc. expects the following monthly sales: January $ 26,000 July $ 20,000 February 17,000...

Esquire Products Inc. expects the following monthly sales: January $ 26,000 July $ 20,000 February 17,000 August 24,000 March 10,000 September 27,000 April 12,000 October 32,000 May 6,000 November 40,000 June 4,000 December 22,000 Total sales = $240,000 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...

Esquire Products Inc. expects the following monthly sales: January $ 43,000 July $ 37,000 February 34,000...

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...

Esquire Products Inc. expects the following monthly sales: January $ 45,000 July $ 39,000 February 36,000...

Esquire Products Inc. expects the following monthly sales: January $ 45,000 July $ 39,000 February 36,000 August 43,000 March 29,000 September 46,000 April 31,000 October 51,000 May 25,000 November 59,000 June 23,000 December 41,000 Total sales = $468,000 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...

Esquire Products Inc. expects the following monthly sales: January $ 32,000 July $ 26,000 February 23,000...

Esquire Products Inc. expects the following monthly sales: January $ 32,000 July $ 26,000 February 23,000 August 30,000 March 16,000 September 33,000 April 18,000 October 38,000 May 12,000 November 46,000 June 10,000 December 28,000 Total sales = $312,000 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...

Esquire Products Inc. expects the following monthly sales: January $ 37,000 July $ 31,000 February 28,000...

Esquire Products Inc. expects the following monthly sales: January $ 37,000 July $ 31,000 February 28,000 August 35,000 March 21,000 September 38,000 April 23,000 October 43,000 May 17,000 November 51,000 June 15,000 December 33,000 Total sales = $372,000 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...

Front Page Video Games Corporation has forecasted the following monthly sales: January $98,000 July $43,000 February...

Front Page Video Games Corporation has forecasted the following monthly sales: January $98,000 July $43,000 February 91,000 August 43,000 March 23,000 September 53,000 April 23,000 October 83,000 May 18,000 November 103,000 June 33,000 December 121,000 Total sales = $732,000 The firm sells its Last Spike video game for $5 per unit, and the cost to produce the game is $2 per unit. A level production policy is followed. Each month's production is equal to annual sales (in units) divided by...

ront Page Video Games Corporation has forecasted the following monthly sales: January $108,000 July $53,000 February...

ront Page Video Games Corporation has forecasted the following monthly sales: January $108,000 July $53,000 February 101,000 August 53,000 March 33,000 September 63,000 April 33,000 October 93,000 May 28,000 November 113,000 June 43,000 December 131,000 Total sales = $852,000 The firm sells its Last Spike video game for $5 per unit, and the cost to produce the game is $2 per unit. A level production policy is followed. Each month's production is equal to annual sales (in units) divided by...

Front Page Video Games Corporation has forecasted the following monthly sales: January $100,000 July $45,000 February...

Front Page Video Games Corporation has forecasted the following monthly sales: January $100,000 July $45,000 February 93,000 August 45,000 March 25,000 September 55,000 April 25,000 October 85,000 May 20,000 November 105,000 June 35,000 December 123,000 Total sales = $756,000 The firm sells its Last Spike video game for $5 per unit, and the cost to produce the game is $2 per unit. A level production policy is followed. Each month's production is equal to annual sales (in units) divided by...

Camera Products Inc. produces two different products with the following monthly data for July: Digital Cameras...

Camera Products Inc. produces two different products with the following monthly data for July: Digital Cameras Tripods Total Selling price per unit $300 $100 Variable cost per unit $240 $ 60 Expected unit sales 28,000 7,000 35,000 Sales mix 80% 20% 100% Fixed costs $700,000 If the sales mix shifts to 85 percent cameras and 15 percent tripods, what happens to the break-even point in units? Brevard Company makes a single product. The company has monthly fixed costs totaling $250,000...

Rockers expects total sales of $ 701,000 for January and $351,000 for February Assume that Rockers's...

Rockers expects total sales of $ 701,000 for January and $351,000 for February Assume that Rockers's sales are collected as follows: 60% in the month of the sale 30% in the month after the sale 7% two months after the sale 3% never collected November sales totaled $397,000, and December sales were $400,000. Prepare a schedule of cash receipts from customers for January and February. Round answers to the nearest dollar.