Question

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.

Jessi Corporation
Schedule of Expected Cash Collections
	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Year
Beginning accounts receivable					$0
1st Quarter sales					0
2nd Quarter sales					0
3rd Quarter sales					0
4th Quarter sales					0
Total cash collections	$0	$0	$0	$0	0

Answer 1

Solution 1:
Sales Budget - Jessi Corporation
Particulars	Q1	Q2	Q3	Q4	Total
Budgeted unit sales	11000	12000	14000	13000	50000
Selling price per unit	$18.00	$18.00	$18.00	$18.00	$18.00
Budgeted Sales	$198,000.00	$216,000.00	$252,000.00	$234,000.00	$900,000.00
Schedule of Expected cash collection
Particulars	Q1	Q2	Q3	Q4	Total
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