Bombs Away Video Games Corporation has forecasted the followingmonthly sales:
  

January	$	118,000	July	$	63,000
February		111,000	August		63,000
March		43,000	September		73,000
April		43,000	October		103,000
May		38,000	November		123,000
June		53,000	December		141,000
Total annual sales = $972,000

Bombs Away Video Games sells the popular Strafe and Capture videogame. It sells for $5 per unit and costs $2 per unit to produce. Alevel production policy is followed. Each month's production isequal to annual sales (in units) divided by 12.

Of each month's sales, 30 percent are for cash and 70 percent areon account. All accounts receivable are collected in the monthafter the sale is made.

a. Construct a monthly production and inventoryschedule in units. Beginning inventory in January is 43,000units.

	Bombs Away Video GamesCorporation Production and InventorySchedule in Units Beginning Inventory + Production – Sales = Ending Inventory January 43,000 February March April May June July August September October November December

b. Prepare a monthly schedule of cash receipts.Sales in December before the planning year are $100,000.

Bombs Away Video GamesCorporation Cash Receipts Schedule January February March April May June Sales Cash receipts: Cash sales Prior month's credit sales Total cash receipts $0 $0 $0 $0 $0 $0 Bombs Away Video GamesCorporation Cash Receipts Schedule July August September October November December Sales Cash receipts: Cash sales Prior month's credit sales Total cash receipts $0 $0 $0 $0 $0 $0 c. Prepare a cash payments schedule for Januarythrough December. The production costs of $2 per unit are paid forin the month in which they occur. Other cash payments, besidesthose for production costs, are $63,000 per month. Bombs Away Video GamesCorporation Cash Payments Schedule January February March April May June Production cost Other cash payments Total cash payments $0 $0 $0 $0 $0 $0 Bombs Away Video GamesCorporation Cash Payments Schedule January February March April May June Production cost Other cash payments Total cash payments $0 $0 $0 $0 $0 $0 d. Prepare a monthly cash budget for Januarythrough December using the cash receipts schedule from partb and the cash payments schedule from part c. Thebeginning cash balance is $5,000, which is also the minimumdesired. (Negative amounts should be indicated by a minussign.) Bombs Away Video GamesCorporation Cash Budget January February March April May June Beginning cash Net cash flow Cumulative cash balance Monthly loan or (repayment) Ending cash balance Cumulative loanbalance Bombs Away Video GamesCorporation Cash Budget July August September October November December Beginning cash Net cash flow Cumulative cash balance Monthly loan or (repayment) Ending cash balance Cumulative loanbalance