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Bombs Away Video Games Corporation has forecasted the following monthly sales: S 44,000 44,000 54,000 84,000 104,000 122,000 January S 99,000 July March Apn May June 92,000 August 24,000 September 24,000 October 19.000 November 34,000 December Total annual sales $744,000 Bombs Away Video Games sells the popular Strafe and Capture video game. It sells for $5 per unit and costs $2 per unit to produce. A level production policy is followed. Each months production is equal to annual sales (in unlits) divided by 12. Of each months sales, 20 percent are for cash and 80 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 24,000 units. Bombs Away Video Games Corporation Production and Inventory Schedule in Units BeginningProductionSales Ending 21,000 16,600 10,600 18,200 25,800 34 400 0,000 43,600 47,200 48.800 44,400 36.000 12,100 12.400 12,400 12.400 12,400 12,400 12,400 12,400 12.400 12.400 12.400 12.400 19,800 18,400 1,800 4,800 3,800 6,800 8,800 B,800 10,800 16,800 20,800 24,400 16,600 10,600 18,200 5,800 34,400 40,000 13,600 47,200 48,800 44 400 36,000 24,000 February March April May July August October

b. Prepare a monthly schedule of cash receipts. Sales in December before the planning year are $100,000 Bombs Away Video Games Corporation Cash Receipts Schedule January February March April May June Sales Cash receipts Cash sale:s Prior months credit sales Total cash receipts 0 S Bombs Away Video Games Corporation Cash Receipts Schedule July August September October November December Sales Cash receipts Cash sales Prior months credit sales Total cash receipts

c. Prepare 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 $44,000 per month Bombs Away Video Games Corporation Cash Payments Schedule January February March April May June Production cost Otner cash payments Total cash paymcnts Bombs Away Video Games Corporation Cash Payments Schedule August July October November December Production cost Other cash payments Total cash payments

d. Prepare a monthly 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 $5,000, which is also the minimum desired. (Negative amounts should be indicated by a minus sign.) Bombs Away Video Games C Cash Budget January February March April May June Beginning cash Nct cash tow Cumulative cash balance Montnly loan or (repayment) Ending cash balance Cumulative loan balarice Bombs Away Video Games Corporation Cash Budget July August September October November December Beginning cash Net cash ow Cumulative cash balance Monthly loan or (repayment) Ending cash balanoc Cumulative loan balance

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Answer #1

b. Cash Receipts Schedule:

2 4 Bomb Awav Video Games Corporatioin Cash Receipts Schedule January (S) February (S) March (S)April (S)May(S) June(S) Sales Cash Redc Cash Sales (20% on Sales) (a) Prior months credit sales Total cash receipts (a +b) 99.000 92,000 24,000 24,000 19,000 34,000 19,800 80,000 99,800 18,400 79,200 97,600 4,800 73,600 78,400 4,800 19,200 24,000 3.800 19,200 23,000 6,800 15.200 22,000 10 12 13 14 15 16 17 Bomb Awav Video Games Corporatioin Cash Receipts Schedule July (S)August (S) September (S) October (S) November (S) December (S) 122,000 Sales Cash Receipts: Cash Sales (20% on Sales) (a) 44.000 44.000 54,000 84.000 104,000 8,800 27,200 36,000 8,800 35,200 44,000 10,800 35,200 46,000 16,800 43.200 60,000 20,800 67,200 88,000 24,400 83.200 107,600 19 20 Prior months credit sales Total cash receipts (a +b)

Excel formulas:

Bomb Away Video Games Corporation Cash Receipts Schedule January (S) February (S) March (S)April (S)May S 24000 June(S) 34000 Sales Cash Rec Cash Sales (20% on Sales) (a) Prior months credit sales Total cash receipts (a b 92000 24000 19000 -08*0.2 N8*0.8 -18*0.2 K8*0.2 100000*0.8-J8*0.8 L8*0.2 K8*0.8 M8*0.2 L8*0.8 M10+Mil EN10+N11 010+011 N8*0.2 M8 0.8 10 Kl0+Kii L10+L11 12 13 14 15 16 17 18 19 20 21 Bomb Awav Video Games Corporation July (S) 44000 Cash Receipts Schedule August (S) September (S) October (S) November (S) December (S) 44000 Sales Cash Rec Cash Sales (20% on Sales) (a) Prior months credit sales Total cash receipts (a + b) 54000 84000 104000 122000 L17*0.2 K17*0.8 -L19+L20 M17 0.2 =L 17*0.8 -MI9tM20 N17*0.2 -M17*0.8 -N19tN20-019+O20 -J 17*0.2 08*0.8 -J19+J20 K17*0.2 -J17*0.8 -Kl9tK20 017*0.2 N17*0.8

c) Cash Payments Schedule:

Bomb Awav Video Games Corporatioin Cash Pavments Schedule 24 25 26 27 28 29 30 31 32 January (S) February (S) March (S) April

Excel formulas:

Bomb Awav Video Games Corporation Cash Pavments Schedule 23 24 25 26 27 28 29 May(S) June(S) January (S) -12400*2 44000 |:J2G+J27 February (S) March (S) 12400 2 12400 2 44000 -K26+K27 April (S) -12400*2 44000 -M26+3127 Production Cost (a Other Cash Payments Total Cash Payments (a + b) 12400 2 44000 12400 2 44000 -O26+027 44000 -L2G+し27 |=N2G+N27 31 32 Bomb Awav Video Games Corporation Cash Pavments Schedule August (S) September (S) October (S) November (S) December (S) July (S) 34 35 36 37 12400 2 44000 *2 12400 2 124002 44000 12400 2 Production Cost (a Other Cash P Total Cash Payments (a+b) J35+J36 K35+K36 FL35+L36 -12400*2 44000 44000 44000 44000 M35+M36 EN35+N36 035+036

d) Cash Budget:

41 42 43 Bomb Awav Video Games Corporatioin Cash Budget January (S) February (S) March (S)April (S)May(S) June(S) Cash (a) 5,000 36,000 64,800 74,400 29,600 5,000 Net Cash Flow (Total Cash Receipts - Total Cash payments)31,000 28,800 9,600 -44,800 -45,800 -46,800 45 Cumulative cash balance (a+b Monthly loan or repayment Ending cash balance Cumulative loan balance -16,200 21,200 5.000 21,200 36,000 64,800 74,400 29,600 -41,800 -46,800 5.000 68,000 47 36,000 64,800 74,400 29,600 49 Bomb Awav Video Games Corporatioin Cash Budget 51 52 53 July (S)August (S) September (S) October (S) November (S) December (S) 5.000 Cash (a) 5.000 5.000 5.000 5.000 5.000 Net Cash Flow (Total Cash Receipts - Total Cash payments) -32,800 -27,800 -32,800 5,000 100,800 24,800 19,800 24,800 5,000 125,600 8,800 -3,800 8,800 5,000 148,400157,200 22,800 17,800 22,800 5,000 19.200 24,200 19,200 5,000 138,000 38,800 43.800 38,800 5,000 99,200 54 56 57 58 Cumulative cash balance (a+b Monthly loan orr Ending cash balance Cumulative loan balance

Excel formulas:

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