Esquire Products Inc. expects the following monthly sales:

January	ps	28,000	July		$ 22,000
February		19,000	August		26,000
March		12,000	September		29,000
April		14,000	October		34,000
Can		8,000	November		42,000
June		6,000	December		24,000
Total Sales = $264,000

Cash sales are 40 percent in a given month, with the rest going to accounts receivable. All accounts receivable are collected in the month following the sale. Esquire sells all its assets at $2 each and produces them at $1 each. Esquire uses leveled production, and the average monthly production is equal to the annual production divided by 12.

a.	Generate a monthly production and inventory schedule in units. The initial inventory in January is 12,000 units.

Esquire Products Inc.
Production schedule and inventory in units
	Start Inventory	+	Production	–	Sales	=	Finalizing Inventory
January	12,000
February
March
April
Can
June
July
August
September
October
November
December

b.	Prepare a calendar of cash receipts from January to December. Suppose dollar sales in the previous December were $20,000.

Esquire Products Inc.
Cash Receipt Schedule
	January		February		March		April		Can		June
Sales	ps		ps		ps		ps		ps		ps
Cash receipts:
Cash sales	ps		ps		ps		ps		ps		ps
Previous month's credit sales
Total cash inflows	ps		ps		ps		ps		ps		ps

Esquire Products Inc.
Cash Receipt Schedule
	July		August		September		October		November		December
Sales	ps		ps		ps		ps		ps		ps
Cash receipts:
Cash sales	ps		ps		ps		ps		ps		ps
Previous month's credit sales
Total cash inflows	ps		ps		ps		ps		ps		ps

C.	Prepare a cash payment schedule from January to December. Production costs ($1 per unit produced) are paid in the month they occur. Other cash payments (in addition to production costs) are $7400 per month.

Esquire Products Inc.
Cash payment schedule
Constant production
	January		February		March		April		Can		June
Cost of production	ps		ps		ps		ps		ps		ps
Other cash payments
Total cash payments	ps		ps		ps		ps		ps		ps

Esquire Products Inc.
Cash payment schedule
Constant production
	July		August		September		October		November		December
Cost of production	ps		ps		ps		ps		ps		ps
Other cash payments
Total cash payments	ps		ps		ps		ps		ps		ps

d.

Build a cash budget for January through December using the Part B cash receipt calendar and Part C cash payment schedule. The starting cash balance is $3,000, which is also the desired minimum. (Don't leave cells blank; be sure to enter "0" where needed. Negative amounts should be indicated with a minus sign).

Esquire Products Inc.
Cash budget
	January		February		March		April		Can		June
Initial cash	ps		ps		ps		ps		ps		ps
Net cash flow
Accumulated cash balance	ps		ps		ps		ps		ps		ps
Monthly loan or (repayment)
Ending cash balance	ps		ps		ps		ps		ps		ps
Accumulated loan balance	ps		ps		ps		ps		ps		ps

Esquire Products Inc.
Cash budget
	July		August		September		October		November		December
Initial cash	ps		ps		ps		ps		ps		ps
Net cash flow
Accumulated cash balance	ps		ps		ps		ps		ps		ps
Monthly loan or (repayment)
Ending cash balance	ps		ps		ps		ps		ps		ps
Accumulated loan balance	ps		ps		ps		ps		ps		ps

e.	Determine the total current assets for each month. Include cash, accounts receivable, and inventory. Accounts receivable for a given month equal 60 percent of that month's sales. Inventory equals ending inventory (part to) multiplied by the cost of $1 per unit.

Esquire Products Inc.
Assets
	Money	Accounts receivable	Inventory	Total current assets
January	ps	ps	ps	ps
February
March

Answer rating: 100% (QA)

ANSWER Lets go through each part of the question and solve it step by step a Monthly Production and Inventory Schedule Esquire Products Inc Production schedule and inventory in units Month Start Inven... View the full answer