Hillyard Company

I.

TITLE OF THE CASE:

Comp Co mple leti ting ng a Maste Masterr Budge Budgett (Hill (Hillya yard rd

Company) II. FACTS OF THE CASE: a. Hill Hillya yard rd Com Compa pany ny,, an ofce ofce suppl supplie ies s speci special alty ty stor store, e, prep prepar ares es its its master budget on a quarterly basis. The olloing data ha!e been assembled to assist in preparing the master budget or the "rst quarter# $s o %ecember &' (the end o the prior quarter), the companys general ledger shoed the olloing account Balances#

Debits

Cash $ccou ccount nt ec ecei ei!a !abl ble e n!entory Buil Buildi ding ng and and 0qui 0quipm pmen entt

* *,+++ --, --,++ ++ + /+,+++ &1+, &1+,++ ++ +

$ccou ccount nt 2ayab ayable le Capi Ca pita tall 4toc 4toc5 5 etai etaine ned d 0arn 0arnin ings gs Totals $

b.

Credit s

702,0 00

3&,+ 3&,+++ ++ 6++, 6++,++ ++ + '+3, '+3,++ ++ + 702,0 00

$ctual tual sa sales les or or %ec %ecembe emberr and and budg budget eted ed sal sales es or or the ne ne7t o our months are as ollos# %ec8'+  :an8'' ;eb8'' Mar8'' $pr8''

c.

9-*+,+++ ++,+++ /++,+++ &++,+++ -++,+++

4ale 4ales s are are -+< -+< or or cash cash and and *+< *+< on on cred credit it.. $ll $ll pay payme ment nts s on cr credit edit sale sales s are are coll collec ecte ted d in the the mont month h oll ollo oin ing g sale sale.. The The acco account unts s recei!able at %ecember &' are a result o %ecember credit sales.

d.

The companys gross margin is +< o sales. (n other ords, cost

e.

o goods sold is /+< o sales.) Monthly e7penses are budgeted as ollos# salaries and ages, 9-1,+++ per month# ad!ertising, 91+,+++ per month= shipping, 6< o sales= other e7penses, &< o sales. %epreciation, including depreciation on ne assets acquired during the quarter, ill be

.

9-,+++ or the quarter. 0ach months ending in!entory should equal -6< o the olloing

g.

months cost o goods sold. >ne8hal o a months in!entory purchases is paid or in the month

h.

o purchase= the other hal is paid in the olloing month. %uring ;ebruary, the company ill purchase a ne copy machine or 9',1++ cash. %uring March, other equipment ill be purchased

i.

or cash at a cost o 9*,6++. %uring :anuary, the company ill declare and pay 96,+++ in cash

 ?.

di!idends. Management ants to maintain a minimum cash balance o  9&+,+++. The company has an agreement ith a local ban5 that allos the company to borro at the beginning o each month. The interest rate on these loans is '-< per month and or simplicity e ill assume that interest is not compounded. The company ould, as ar as it is able, repay the loan plus accumulated interest at the end o the quarter.

III.

ANALYSIS/SOLUTIONS:

@sing the data abo!e, complete the olloing statements and schedules or the "rst quarter#

Step 1. n order to complete the requirements, identiy "rst the 4ales

Budget or the end quarter rom the gi!en abo!e# Hillyard Company 4ales Budget ;or the Auarter ended March &+,-+''  !"#!r$

Budgeted 4ales in %ollars T*t!) +#deted S!)es -

Febr#!r$

++,+++.++ 00,000.0 0

/++,+++.++ 00,000.0 0

%!r&'

&++,+++.++ 00,000.0 0

(#!rter

',&++,+++.++ 1,00,000.0 0

'. Complete the schedule o e7pected cash collection# i!en that credit shall be collected the olloing month and only the cash can be reected in the collection o the current month, belo are the corresponding monthly data or the e7pected cash collection. Hillyard Company 07pected Cash Collection ;or the Auarter ended March &+,-+''  !"#!r$

$ccount ecei!able %ecember &' (*+< o -*+,+++.++)  !"#!r$ 2011 S!)es o -+<  ++,+++.++ o *+<  ++,+++.++ Febr#!r$ 2011 S!)es

-+<

o 

/++,+++.++

o *+<  /++,+++.++ %!r&' 2011 S!)es

Febr#!r$

%!r&'

(#!rter

--,+++.+ +

--,+++.++

*+,+++.++

*+,+++.++ &-+,+++.+ +

&-+,+++.++

'-+,+++.+ +

'-+,+++.++ *+,+++.+ +

*+,+++.++

-+<

o 

&++,+++.++

T*t!) C!s' C*))e&ti*"

-

0,000. 00

0,000. 00

/+,+++.++

/+,+++.++

0,000. 00

1,2,000. 00

2.!. Calculate or the merchandise purchases budget# Step 1. Calculate or the Budgeted Cost o oods 4old#  !"#!r$

Febr#!r$

%!r&'

(#!rter

++,+++.++

/++,+++.+ +

&++,+++.+ +

',&++,+++.+ +

'/+,+++.++

-+,+++.+ +

'-+,+++.+ +

6-+,+++.++

0,000. 00

10,000. 00

70,000.00

4ales in %ollars

ross Margin

+#deted C*st *3  4**ds S*)d - 20,000.00

Step 2. Calculate or the %esired 0nding n!entory#

Cost of Goods Sold for Next Month

 !"#!r$ &/+,+++.++

2ercentage o De7t MonthEs C>4 Desired E"di" I"5e"t*r$ -

+.-6 60,000.0 0

 

Febr#!r$ '*+,+++.+ + +.-6 ,000.0 0

%!r&' '-+,+++.+ + +.-6 0,000.0 0

Step . 4ummariFe the data or the Merchandise 2urchases Budget#

Hillyard Company n!entory 2urchase Budget ;or the Auarter ended March &+,-+''

Budgeted Cost o oods 4old $dd# %esired 0nding n!entory  Total Deeds Gess# Beginning n!entory

 !"#!r$ -+,+++.+ +

3+,+++.++ &&+,+++.+ + /+,+++.++

Febr#!r $ &/+,+++. ++ 6,+++.+ + +6,+++. ++ 3+,+++.+ +

%!r&' '*+,+++. ++ &+,+++.+ + -'+,+++. ++ 6,+++.+ +

(#!rter 1*+,+++.+ +

&+,+++.++ *'+,+++.+ + /+,+++.++

e8#ired I"5e"t*r$ 9#r&'!se -

270,000. 00

1,000 .00

1,000 .00

70,000. 00

2.b Calculate or the 4chedule o 07pected Cash %isbursements8 Merchandise 2urchases Step 1. Calculate or the monthly purchases considering the payment scheme o paying hal or the current month and the other hal on to the ne7t month# Hillyard Company Cash %isbursement or 2urchase ;or the Auarter ended March &+,-+''

 !"#!r$

%ecember 2urchase  :anuary 2urchase (6+< + -1+,+++.++)

Febr#!r $

3&,+++.+ +

(#!rter

3&,+++.++

'&6,+++. ++

'&6,+++. ++

;ebruary 2urchase (6+< &'6,+++.++)

'61,6++. ++

March 2urchase (6+< o '/6,+++.++) T*t!) C!s' Disb#rsee"t 3*r 9#r&'!se -

%!r&'

22,000. 00

262,00. 00

-1+,+++.+ + '61,6++. ++

&'6,+++.+ +

*-,6++.+ +

*-,6++.++

20,000. 00

70,00.0 0

&. Complete the Cash %isbursement or >perating 07penses# Step 1. Calculate or the monthly >ther 07penses

S!)es 9er&e"t!e *3 S!)es 3*r *t'er e;pe"ses Ot'er E;pe"ses -

!"#!r$   ++,++ +.++ +.+&  

12,000 .00

Febr#!r$ /++,+++ .++ +.+&

%!r&' &++,+++ .++ +.+&

1,000 .00

6,000 .00

Step 2. Calculate or the monthly 4hipping 07penses !"#!r$

Febr#!r$

%!r&'

S!)es

 

9er&e"t!e *3 S!)es 3*r s'ippi" e;pe"ses S'ippi" E;pe"ses -

20,000.00

++,++ +.++ +.+6

/++,+++ .++ +.+6

0,000.0 0

&++,+++ .++ +.+6

1,000.0 0

Step . Complete the Cash %isbursement or >perating 07penses table Hi))$!rd C*p!"$ C!s' Disb#rsee"t 3*r Oper!ti" E;pe"ses F*r t'e (#!rter e"ded %!r&' 0,2011  !"#!r$

Febr#!r$

%!r&'

(#!rter

-1,+++.++

-1,+++.++

-1,+++.++

*',+++.++

1+,+++.++

1+,+++.++

1+,+++.++

-'+,+++.++

-+,+++.++

&+,+++.++

'6,+++.++

/6,+++.++

'-,+++.++

'*,+++.++

3,+++.++

&3,+++.++

126,000. 00

1,000. 00

121,000. 00

6,000.0 0

4alaries and ages $d!ertising 4hipping 07penses >ther 07penses T*t!) C!s' Disb#rsee"t

-

. Complete the Cash Budget# Step 1# 4ummariFe all cash transactions

Hi))$!rd C*p!"$ C!s' +#det F*r t'e (#!rter e"ded %!r&' 0,2011 +ei""i" C!s' +!)!"&e Add: C!s' C*))e&ti*"

 !"#!r$

Febr#!r$

%!r&'

(#!rter

*,+++.++

&+,+++.++

&+,*++.++

*,+++.++

&+,+++.+ +

+,+++.+ +

6+,+++.+ +

',-*,+++.+ +

&6-,+++.+ +

1+,+++.+ +

61+,*++.+ +

',&&-,+++.+ +

--*,+++.+ +

-3-,6++.+ +

-+,+++.+ +

1/+,6++.++

'-3,+++.+ +

'6,+++.+ +

'-',+++.+ +

&36,+++.++

8

',1++.++

*,6++.++

*/,-++.++

6,+++.++

8

8

6,+++.++

+-,+++.+ +

&3,-++.+ +

6,6++.+ +

',-*/,1++.+ +

(6+,+++.++ )

&+,*++.++

'-6,&++.+ +

6,&++.++

T*t!) C!s' A5!i)!b)e

Less: C!s' Disb#rsee"t n!entory 2urchase

>perating 07pense 0quipment 2urchase Cash %i!idend T*t!) C!s' Disb#rsee"t E;&ess/De<&ie"&$

Fi"!"&i ":

Borroing *+,+++.++

*+,+++.++

epayments 8

(*+,+++.++ )

(*+,+++.++)

8

(-,++.++)

(-,++.++)

nterest T*t!) Fi"!"&i"

E"di" C!s' +!)!"&e

*+,+++.++

8

(*-,++.++ )

(-,++.++)

0,000.0 0

0,00.0 0

2,600.0 0

2,600.00

-

Step 2: nterest as obtained using the olloing data#

4ince the company required to maintain a minimum cash balance o  9&+,+++.++ and a 96+,+++.++ cash de"ciency as posted ater summariFing the cash transactions, a borroing orth 9*+,+++.++ must be done to "nance these requirements. @sing the 9*+,+++ principal amount and the interest rate o '-< e calculate the interest# I27r7t here 2 I principal amount I 9*+,+++ r I interest rate I '-< t I interest time I &J'- (quarterly) nterest I 9*+,+++ 7 .'- 7 .-6 I"terest = -2,00

. 2repare an absorption costing income statement or the quarter

ending March &' as shon in 4chedule 3 in the chapter# Hillyard Company Budgeted ncome 4tatement ;or the Auarter ended March &+, -+'' S!)es Less:

1,00,000 .00

Cost o oods 4old 1*+,+++.+ +

.

4r*ss %!ri"

6-+,+++.+ + sheet

Less:

>perating 07penses &36,+++.+ +

&'. Step

%epreciation -,+++.++ Oper!ti" I"&*e

the

*&,+++.++ Less:

nterest 07pense

;or

2repare

a

balance as o March 1. 4ol!e or

$ccount

-,++.++

ecei!able the

0,00.00

recei!ables

Net I"&*e

o sales on credit or the month o March amounting to *+< o  9&++,+++.++# $ccount ecei!able I *+< K 9&++,+++ A&&*#"t e&ei5!b)e I - 20,000 Step 2. 4ol!e or the Building and 0quipment  Total BL0 I Beginning BL0  De 2urchases N %epreciation  Total BL0 I 9&1+,+++  (9*,6++  9',1++.++) 8 9-,6++.++  Total BL0 I 9&1+,+++  9 */,-++ 8 9-,+++ T*t!) +#i)di" !"d E8#ipe"t = -1,200.00 Step . 4ol!e or $ccount 2ayable# ;or the payment o March purchases amounting to 6+< o the 9'/6,+++.++ $ccount 2ayable I 6+< K 9'/6,+++ A&&*#"t 9!$!b)e = -2,00 Hillyard Company Budgeted Balance 4heet $s o Auarter ended March &+, -+'' C#rre"t Assets Cash

-,3++.++ $ccount ecei!able -+,+++.+ + n!entory &+,+++.++ T*t!) C#rre"t Assets

&'-,3++.+ + +#i)di" !"d E8#ipe"t

',-++.+ + T*t!) Assets 727,100. 00 Li!bi)ities !"d E8#it$ $ccount 2ayable

*-,6++.++ E8#it$: Common 4toc5

6++,+++.+ + etained 0arnings# $dd# Gess#

Beginning Det ncome  Total Cash %i!idend

'+3,+++.++ *+,/++.++ '*3,/++.++ 6,+++.++

',/++.+ +

T*t!) Li!bi)it$ !"d E8#it$ 727,100. 00

I>.

CONCLUSION $ master budget by de"nition is the aggregation o all loer8le!el

budgets produced by a companyEs !arious unctional areas, and also includes budgeted "nancial statements, cash orecast, and a "nancing plan. The master budget is typically presented in either a monthly or quarterly ormat, or usually co!ers a companyEs entire "scal year. $n e7planatory te7t may be included ith the master budget, hich e7plains the companyEs strategic direction, ho the master budget ill assist in accomplishing speci"c goals, and the management actions needed to achie!e the budget. n Hillyard Company, determining the e7pected cash collections, merchandise purchase budget, e7pected cash disbursements or merchandise purchases, e7pected cash disbursements or selling and administrati!e e7penses, cash budget, absorption costing income statement and balance sheet are important actors in the success o  the companys ob?ecti!es and goals. t shall also properly allocate resources, pro!ide areas or impro!ement in determining hich part o  the process ha!e bottlenec5s and instill a culture o coordination, sense o sufciency and aid the company toards meeting budgeted sales. By determining the production schedule, management can chec5 hether there ould be necessary ad?ustments needed in labor, direct materials and all aspect related to the production o the goods. $n estimated o the cash inos and outos using the cash budget can also help the management in properly allocating the resource or

re!enue generating acti!ities and as chec5ing mechanism or possible >.

liquidity problems. ECO%%ENDATION $ master budget is the central planning tool that a management team uses to direct the acti!ities o a corporation, as ell as to ?udge the perormance o its !arious units. ith this Hillyard Company shall continue using these tools in order to chec5 on possible problems and plan ahead. i!en the Budgeted Balance 4heet, e can see that Hillyard Company has high $ccount ecei!ables. Management may loo5 into this as an opportunity to chec5 hether they can consider steps on ho to impro!e the collection method o the company. ;rom the data o the Budgeted ncome 4tatement, Hillyard Company orecasted the company to earn 9 *+,/++.++ hich indicates that it is still earning ell. 4ince the company is maintaining a 9&+,+++ cash balance and there as an e7cess o 9'-,3++.++ cash, the management can create in!estment programs or these e7tra cash to generate more

>I.

re!enues. EFEENCES http#JJde5ushtia."les.ordpress.comJ-+'http#JJ.accountingtools.comJmaster8budget

CASE 2 I. .

TITLE OF THE CASE: 4easonal 2roducts Corporation FACTS OF THE CASE: 4easonal 2roducts Corporation e7pects the olloing monthly sales#

 :anuary.................. 9-+,+++ 9-+,+++

May........... 9',+++

4eptemberO..

;ebruary................ '6,+++ ..............................-6,+++

:une...........

&,+++

>ctober..........

March..................... 6,+++ ..............................&+,+++

:uly............ '+,+++

Do!ember. .. .. .

$pril....................... &,+++ ..............................--,+++

$ugust....... ',+++

%ecember. .. .. .

Total annual sales I 9'/*,+++

4ales are -+ percent or cash in a gi!en month, ith the remainder going into accounts recei!able. $ll *+ percent o the credit sales are collected in the month olloing the sale. 4easonal 2roducts sells all o its goods or 9- each and produces them or 9' each. 4easonal 2roducts uses le!el production, and a!erage monthly production is equal to annual production di!ided by '-.

III.

STATE%ENT OF THE 9O+LE%/E(UIED: a.

enerate a monthly production and in!entory schedule in u nits. Beginning in!entory in :anuary is 6,+++ units. (Dote# To do part a, you should or5 in terms o units o production and units o sales.)

b.

 %etermine a cash receipts schedule or :anuary through

%ecember. $ssume that dollar sales in the prior %ecember ere 9'6,+++. or5 part b using dollars. c.

%etermine a cash payments schedule or :anuary through

%ecember. The production costs (9' per unit produced) are paid or in the month in hich they occur. >ther cash payments, besides those or production costs, are 9/,+++ per month. d .

 Construct a cash budget or :anuary through %ecember. The

beginning cash balance is 9',+++, and that is also the required minimum. e.

%etermine total current assets or each month. (Dote# $ccounts

recei!able equal sales minus -+ percent o sales or a gi!en month. I>.

ANALYSIS/SOLUTIONS: Monthly 2roduction and n!entory 4chedule in units !. Step 1. Calculate the 2roduction Ge!el per month#

$nnual 2roduction in units I $nnual 4ales J 4ales 2rice per unit I 9'/*,+++ J 9A""#!) 9r*d#&ti*" i" #"its I ,000 #"its 2roduction le!el per month I $nnual 2roduction in units J 'I *,+++J'- months  9r*d#&ti*" )e5e) per *"t' = 7,000 #"its/*"t' Step 2. Calculate the monthly 4ales in units Se!s*"!) 9r*d#&ts C*rp*r!ti*" %*"t')$ S!)es i" U"its %*"t'

 :anuary ;ebruary March $pril May  :une  :uly $ugust 4eptemb er >ctober Do!embe r %ecembe r

%*"t')$ S!)es -+,+++. ++ '6,+++. ++ 6,+++. ++ &,+++. ++ ',+++. ++ &,+++. ++ '+,+++. ++ ',+++. ++   -+,+++. ++ -6,+++. ++   &+,+++. ++   --,+++. ++

9ri&e/U "it -

S!)es

'+,+++

-

1,6++

-

-,6++

-

',6++

-

6++

-

',6++

-

6,+++

-

1,+++

-

'+,+++

-

'-,6++

-

'6,+++

-

'',+++

Step . Complete the Monthly 2roduction and n!entory 4chedule

in units using the ormula belo# E"di" I"5e"t*r$ = +ei""i" I"5e"t*r$ ? 9r*d#&ti*" @)e5e) B S!)es Se!s*"!) 9r*d#&ts C*rp*r!ti*" %*"t')$ 9r*d#&ti*" !"d I"5e"t*r$ S&'ed#)e

%*"t'

 !"#!r$ Febr#!r$ %!r&' Apri) %!$  #"e  #)$ A##st Septeber O&t*ber N*5eber De&eber

+ei""i" I"5e"t*r$

9r*d#&ti*" @)e5e)

S!)es

1,+++ 1,+++ 1,+++ 1,+++ 1,+++ 1,+++ 1,+++ 1,+++ 1,+++ 1,+++ 1,+++ 1,+++

'+,+++ 1,6++ -,6++ ',6++ 6++ ',6++ 6,+++ 1,+++ '+,+++ '-,6++ '6,+++ '',+++

6,+++ -,+++ ',6++ /,+++ '',6++ '*,+++ -&,6++ -6,6++ -6,6++ --,6++ '1,+++ 3,+++

E"di" I"5e"t*r$ @-1 per #"it -,+++ ',6++ /,+++ '',6++ '*,+++ -&,6++ -6,6++ -6,6++ --,6++ '1,+++ 3,+++ 6,+++

b. 2repare a Cash eceipts 4chedule Step 1. ;rom the gi!en data, sol!e "rst or the Cash 4ales o 

 :anuary using %ecembers data#  :anuary 2rior Months 4ales I %ecember 4ales K *+< I 9'6,+++ K .*+  :anuary 2rior Months 4ales I -12,000.00 Step 2. Complete the monthly Cash eceipts 4chedule rom

 :anuary through %ecember#

Se!s*"!) 9r*d#&ts C*rp*r!ti*" C!s' e&eipts S&'ed#)e

4ales -+< Cash 4ales *+< 2rior Months 4ales T*t!) re&eipts

4ales -+< Cash

 !" 9-+,+++

Feb 9'6,+++

%!r 96,+++

Apr 9&,+++

%!$ 9',+++

#"e 9&,+++

,+++

&,+++

',+++

/++

-++

/++

'-,+++

'/,+++

'-,+++

,+++

-,++

*++

-1,00 0

-16,00 0

-1,000

-,00

-2,00

-1,00

 #)$ 9'+,+++ -,+++

A# 9',+++ -,*++

Sept 9-+,+++ ,+++

O&t 9-6,+++ 6,+++

N*5 9&+,+++ /,+++

De& 9--,+++ ,++

4ales *+< 2rior Months 4ales T*t!) re&eipts

-,++

*,+++

'',-++

'/,+++

-+,+++

-,+++

-,00

-10,0 0

-1,200

-21,00 0

-2,00 0

-2,0 0

c. $ccomplish the Cash 2ayments 4chedule or :anuary through %ecember Step 1. Complete the Cash 2ayments 4chedule using the gi!en data# Se!s*"!) 9r*d#&ts C*rp*r!ti*" C!s' 9!$e"ts S&'ed#)e C*"st!"t pr*d#&ti*"

2roduction Cost (9'Junit) >ther cash payments T*t!) p!$e"ts

2roduction Cost (9'Junit) >ther cash payments T*t!) &!s' p!$e"ts

 !" 1,+++.+ + /,+++.+ + 1,000 .00

Feb 1,+++.+ + /,+++.+ + 1,000 .00

%!r 1,+++.+ + /,+++.+ + 1,000 .00

Apr 1,+++.+ + /,+++.+ + 1,000 .00

%!$ 1,+++.+ + /,+++.+ + 1,000 .00

#"e 1,+++.+ + /,+++.+ + 1,000 .00

 #)$ 1,+++.+ + /,+++.+ + 1,000 .00

A# 1,+++.+ + /,+++.+ + 1,000 .00

Sept 1,+++.+ + /,+++.+ + 1,000 .00

O&t 1,+++.+ + /,+++.+ + 1,000 .00

N*5 1,+++.+ + /,+++.+ + 1,000 .00

De& 1,+++.+ + /,+++.+ + 1,000 .00

d. Construct a cash budget or :anuary through %ecember using the ormulas belo# C##)!ti5e +!)!"&e I Cash o  Beginning Cash C##)!ti5e L*!" @&#rre"t I Monthly Goan or repayment (pre!ious month i there is any)  Monthly Goan or repayment o  current month E"di" +!)!"&e I Cumulati!e Balance  Monthly Goan or repayment o current month Se!s*"!) 9r*d#&ts C*rp*r!ti*" C!s' 9!$e"ts S&'ed#)e C!s' +#det

 !"

Feb

%!r

Apr

%!$

#"e

Cash o

9&,+++

8+8

Beginning cash

',+++

9 /,+++ ,+++

(9'+, ++) ',/++

(9'',/ ++) ',+++

Cumulati!e cash balance Monthly loan or (repayment) Cumulati!e loan E"di" &!s' b!)!"&e

,+++

(9 *,++) '+,++ + ',/++

(*,*++)

8+8

3,*++

('+,/+ +) '',/++

Cash o Beginning cash Cumulati!e cash balance Monthly loan or (repayment) Cumulati!e loan E"di" &!s' b!)!"&e

8+8

'+,++ + 8+8

'+,++ + '+,++ + 8+8

8+8 -,0 00

8+8 -10,0 00

8+8 -10,0 00

8+8 1,0 0

3,*++ 1,000

-',++ 1,000

 #)$

A#

Sept

O&t

N*5

De&

(9 *,/++) ',+++ (1,/++ ) *,/++

(9-,-+ +) ',+++ (',-++)

9 -,-++ ',+++ &,-++

9 *,+++ ',+++ 3,+++

9'6,+ + ',+++ '/,++

-,-++

(-,-++)

&+,++ + 1,00 0

&-,-+ + 1,000

&+,++ + 1,000

(*,+++ ) --,++ + 1,00 0

9'&,+ ++ ',+++ ',++ + ('&,++ +) 3,+++ 1,000

7,00

(3,+++) 8+8

 The data abo!e shoed ho 4easonal 2roducts Corporation managed to schedule the a!ailment o loans and repayments.

e. %etermine total monthly assets# Step 1. 4ol!e or the $ccounts ecei!ables#

i!en that A&&*#"ts e&ei5!b)e I Monthly 4ales N -+< o  Monthly 4ales

%*"t'  !"#!r$ Febr#!r$ %!r&' Apri) %!$  #"e  #)$ A##st Septeb er O&t*ber N*5eb er De&ebe r

%*"t')$ S!)es -+,+++.++ '6,+++.++

20 *3  S!)es ,+++.++ &,+++.++

A&&*#"ts e&ei5!b)e '/,+++.++ '-,+++.++

6,+++.++ &,+++.++ ',+++.++

',+++.++ /++.++ -++.++

,+++.++ -,++.++ *++.++

&,+++.++ '+,+++.++ ',+++.++

/++.++ -,+++.++ -,*++.++

-,++.++ *,+++.++ '',-++.++

-+,+++.++

,+++.++

'/,+++.++

-6,+++.++

6,+++.++

-+,+++.++

&+,+++.++

/,+++.++

-,+++.++

--,+++.++

,++.++

'1,/++.++

Step 2. 4ummariFe the data or the total $ssets using the 0nding cash

balance or the Cash input and 0nding n!entory rom the 2roduction and n!entory 4chedule or the n!entory input# Se!s*"!) 9r*d#&ts C*rp*r!ti*" Assets

%*"t'

C!s'

A&&*#"ts e&ei5!b)e

I"5e"t*r$

T*t!) C#rre"t

 !"#!r$ Febr#!r$ %!r&' Apri) %!$  #"e  #)$ A##st Septebe r O&t*ber N*5eber De&eber

9 ,+++ '+,+++ '+,+++ ',/++ ',+++ ',+++ ',+++ ',+++ ',+++

9'/,+++ '-,+++ ,+++ -,++ *++ -,++ *,+++ '',-++ '/,+++

9 -,+++ ',6++ /,+++ '',6++ '*,+++ -&,6++ -6,6++ -6,6++ --,6++

9--,+++ -&,6++ -+,+++ '6,6++ '3,*++ -/,3++ &,6++ &1,1++ &3,6++

',+++ ',+++ 1,++

-+,+++ -,+++ '1,/++

'1,+++ 3,+++ 6,+++

&*,+++ &,+++ &+,+++

 The asset data abo!e shos the asset build up rom the most liquid (cash) to the least liquid (in!entory). CONCLUSION:

4easonal 2roducts Corporation approach in using the le!el production method is useul since the pro?ected sales are not balanced. 4ales climb up starting only rom :uly to pea5 on Do!ember and start to slo don starting :anuary.  This imbalance in sales pro?ection can pose a problem i production schedule is not careully planned. hen the company has spi5es in production demand, it might need to pay o!ertime, add a shit or hire contract or5ers to "ll orders but during slo periods, it might be contractually bound to pay idle or5ers. $ le!el production ansers this problem by maintaining the capacity o the production including labor. Constant production also maintains constant cash payments schedules and relies on the orecasted sales or the cash receipts schedules and accounts recei!ables. >II.

ECO%%ENDATION

@sing the production le!eling 4easonal 2roducts Corporation produce intermediate goods at a constant rate so that urther processing may also be carried out at a constant and predictable rate. Ge!el production is bene"cial in times here there are spi5es in demand by le!eling the output here e7tra goods are 5ept as in!entory and shall be disposed during pea5 seasons. This ay, labor costs are reduced. Ge!el production also eliminates the pressure or the company to o!erboo5 the production acility, transport acility and maintain supply and demand o ra materials thus maintaining good relationships ith customers and suppliers. >III.

EFEENCES

http#JJen.i5ipedia.orgJi5iJ2roductionPle!eling