7 ceipts schedule for January through April Front Page Video Games Corporation has forecasted the following monthly sales: $95,000 July..... $ 40,000 88,000 August. 40.000 20,000 September 50.000 20,000 October B0.000 15,000 November 100,000 30,000 December 118,000 January February March April May June. Total sales = $696,000 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 12. of each month's sales, 30 percent are for cash and 70 percent are on account. All accounts receivable are collected in the month after the sale is made. a. Construct a monthly production and inventory schedule in units. Beginning inventory in January is 20,000 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. Sales in the December before the planning year were $100,000. Work part busing dollars. c. Determine a cash payments schedule for January through December. The production costs of $2 per unit are paid for in the month in which they occur. Other cash payments, besides those for production costs, are $40,000 per month. d. Prepare a monthly cash budget for January through December. The beginning cash balance is $5,000, and that is also the minimum desired. Seasonal Products Corporation expects the following monthly sales: $10,000 July... $20,000 January 14,000 15,000 August February 20,000 5,000 September March .. 25,000 3,000 October .... April.. 30,000 1.000 November 22 00 G H Problem 6 Page 209 problem #7 GIVEN Forecasted Sales $ @ $5 per unit Divide by $5 Forecasted Sales in Units Divide total by 12 months Forecasted Production > PART (a) Production and Inventory Schedule Beginning inventory (units) Add production (units) 3 4 15 75 17 18 19 20 21 Goods Available for Sale (units) Goods Sold (units) D E F PART (a) Production and Inventory Schedule Beginning inventory (units) Add production (units) Goods Available for Sale (units) Goods Sold (units) Ending inventory (units) 9 ASSUMES equal production in units per month Sales lan Feb Mar Apr May lun Jul Aws Sep Cash (30%) Credit 70%) Dec 30,000 70,000 100,000 CASH BUDGET Jan Feb Mar Apr May Jun Jul Aug Sep Cash Receipts Cash Sales 10 Collections on A/R 12 Cash Disbursements Production Costs $2 per unit Other Costs 15 16 17 Change in Cash 18 19 Cash at Beginning of Period 20 21 Increase (decrease in line of credit 0 Collections on A/R 1 2 Cash Disbursements 3 Production Costs @ $2 per unit 14 Other Costs s 16 17 Change in Cash 18 19 Cash at Beginning of Period 20 21 Increase (decrease) in line of credit 22 23 Cash at End of Period 24 250/line of credit 26 27 28 minimum Cash balance of $5,000 maintained 29 loan paid down when possible Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec