Question

# The marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal...

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

 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