Question

The marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal year (all sales are on account): Budgeted unit sales 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 11,200 12,200 14,200 13,200 The selling price of the company's product is $11 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 $70,600. The company expects to start the first quarter with 1,680 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 1,880 units. Required: 1. Calculate the estimated sales for each quarter of the fiscal year and for the year as a whole. 2. Calculate the expected cash collections for each quarter of the fiscal year and for the year as a whole. 3. Calculate the required production in units of finished goods for each quarter of the fiscal year and for the year as a whole. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Calculate the expected cash collections for each quarter of the fiscal year and for the year as a whole. 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Total cash collections

Answer 1

1.

	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Year
Budgeted unit sales	11,200	12,200	14,200	13,200	50,800
Selling price per unit	$11	$11	$11	$11	$11
Sales	$123,200	$134,200	$156,200	$145,200	$558,800

2.

	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Year
Sales collected in the same quarter (Sales * 65%)	$80,080	$87,230	$101,530	$94,380	$363,220
Sales collected in the following quarter (Previous quarter sales * 30%)	$70,600	$36,960	$40,260	$46,860	$194,680
Total cash collections	$150,680	$124,190	$141,790	$141,240	$557,900

3.  

	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Year
Budgeted unit sales	11,200	12,200	14,200	13,200	50,800
Desired ending inventory (Net quarter sales * 15%)	1,830	2,130	1,980	1,880	1,880
Beginning inventory	(1,680)	(1,830)	(2,130)	(1,980)	(1,680)
Required production in units	11,350	12,500	14,050	13,100	51,000