"6-19. Solution:Sharpe Computer Graphics Corporationa. Production and inventory schedule in unitsBeginning = Ending1 2Inventory +Production–Sales Inventory January 15,000 9,600 16,000 8,600February 8,600 9,600 14,000 4,200March 4,200 9,600 2,000 11,800April 11,800 9,600 2,000 19,400May 19,400 9,600 3,000 26,000June 26,000 9,600 4,000 31,600July 31,600 9,600 6,000 35,200August 35,200 9,600 6,200 38,600September 38,600 9,600 8,000 40,200October 40,200 9,600 14,000 35,800November 35,800 9,600 18,000 27,400December 27,400 9,600 22,000 15,000 1Total annual sales = $576,000$576,000/$5 per unit = 115,200 units 115,200 units/12 months = 9,600 per month2Monthly dollar sales/$5 price = unit salesS6-24 S6-256-19. (Continued)b. Cash Receipts Schedule Jan. Feb. Mar. Apr. May JuneSales (in dollars) $80,000 $70,000 $10,000 $10,000 $15,000 $20,00030% Cash sales 24,000 21,000 3,000 3,000 4,500 6,00070% Prior month’s sales 63,000* 56,000 49,000 7,000 7,000 10,500Total cash receipts $87,000 $77,000 $52,000 $10,000 $11,500 $16,500*based on December sales of $90,000 July Aug. Sept. Oct. Nov. Dec.Sales (in dollars) $30,000 $31,000 $40,000 $70,000 $90,000 $110,00030% Cash sales 9,000 9,300 12,000 21,000 27,000 33,00070% Prior month’s sales 14,000 21,000 21,700 28,000 49,000 63,000Total cash receipts $23,000 $30,300 $33,700 $49,000 $76,000 $ 96,000 S6-266-19. (Continued)c. Cash Payments ScheduleConstant production Jan. Feb. Mar. Apr. May June9,600 units × $2 $19,200 $19,200 $19,200 $19,200 $19,200 $19,200Other cash payments 30,000 30,000 30,000 30,000 30,000 30,000Total cash payments $49,200 $49,200 $49,200 $49,200 $49,200 $49,200 July Aug. Sept. Oct. Nov. Dec.9,600 units × $2 $19,200 $19,200 $19,200 $19,200 $19,200 $19,200Other cash payments 30,000 30,000 30,000 30,000 30,000 30,000Total cash payments $49,200 $49,200 $49,200 $49,200 $49,200 $49,200 S6-276-19. (Continued)d. Cash Budget Jan. Feb. Mar. Apr. May JuneNet cash flow $37,800 $27,800 $ 2,800 ($39,200) ($37,700) ($32,700)Beginning cash 5,000 42,800 70,600 73,400 34,200 5,000Cumulative cash balance 42,800 70,600 73,400 34,200 (3,500) (27,700)Monthly loan or (repayment) -0- -0- -0- -0- 8,500 32,700Cumulative loan -0- -0- -0- -0- 8,500 41,200Ending cash balance 42,800 70,600 73,400 34,200 5,000 5,000 July Aug. Sept. Oct. Nov. Dec.Net cash flow ($26,200) ($18,900) ($15,500) ($200) $26,800 $46,800Beginning cash 5,000 5,000 5,000 5,000 5,000 5,000Cumulative cash balance (21,200) (13,900) (10,500) 4,800 31,800 51,800Monthly loan or (repayment) 26,200 18,900 15,500 200 (26,800) (46,800)Cumulative loan 67,400 86,300 101,800 102,000 75,200 28,400Ending cash balance 5,000 5,000 5,000 5,000 5,000 5,000 20.Seasonal Products Corporation expects the following monthly sales:January .............. $20,000 May ............. $1,000 September ......... $20,000February ............ 15,000 June ............. 3,000 October .............. 25,000March ................ 5,000 July .............. 10,000 November .......... 30,000April .................. 3,000 August ......... 14,000 December .......... 22,000Total annual sales = $168,000Sales are 20 percent for cash in a given month, with the remainder going into accountsreceivable. All 80 percent of the credit sales are collected in the month following the sale.Seasonal Products sells all of its goods for $2 each and produces them for $1 each.Seasonal Products uses level production, and average monthly production is equal toannual production divided by 12.a. Generate a monthly production and inventory schedule in units. Beginning inventory inJanuary is 5,000 units. (Note: To do part a, you should work in terms of units ofproduction and units of sales.)b. Determine a cash receipts schedule for January through December. Assume that dollarsales in the prior December were $15,000. Work part b using dollars.c. Determine a cash payments schedule for January through December. The productioncosts ($1 per unit produced) are paid for in the month in which they occur. Other cashpayments, besides those for production costs, are $6,000 per month.d. Construct a cash budget for January through December. The beginning cash balance is$1,000, and that is also the required minimum.e. Determine total current assets for each month. (Note: Accounts receivable equal salesminus 20 percent of sales for a given month.)S6-28 "