The marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal year (all sales are on account):
|1st Quarter||2nd Quarter||3rd Quarter||4th Quarter|
|Budgeted unit sales||11,000||12,000||14,000||13,000|
The selling price of the company’s product is $18.00 per unit. Management expects to collect 65% of sales in the quarter in which the sales are made, 30% in the following quarter, and 5% of sales are expected to be uncollectible. The beginning balance of accounts receivable, all of which is expected to be collected in the first quarter, is $70,200.
The company expects to start the first quarter with 1,650 units in finished goods inventory. Management desires an ending finished goods inventory in each quarter equal to 15% of the next quarter’s budgeted sales. The desired ending finished goods inventory for the fourth quarter is 1,850 units.
1-b. Complete the schedule of expected cash collections.
|Sales Budget - Jessi Corporation|
|Budgeted unit sales||11000||12000||14000||13000||50000|
|Selling price per unit||$18.00||$18.00||$18.00||$18.00||$18.00|
|Schedule of Expected cash collection|
|Beginning accounts receivables||$70,200.00||$70,200.00|
|Collection of Q1 Sales||$128,700.00||$59,400.00||$188,100.00|
|Collection of Q2 Sales||$140,400.00||$64,800.00||$205,200.00|
|Collection of Q3 Sales||$163,800.00||$75,600.00||$239,400.00|
|Collection of Q4 Sales||$152,100.00||$152,100.00|
|Total Cash Collections||$198,900.00||$199,800.00||$228,600.00||$227,700.00||$855,000.00|
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