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 13,000 14,000 16,000 4th Quarter 15,000 Budgeted unit sales The selling price of the company's product is $29 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 $74,200. The company expects to start the first quarter with 2,600 units in finished goods inventory Management desires an ending finished goods inventory in each quarter equal to 20% of the next quarter's budgeted sales. The desired ending finished goods inventory for the fourth quarter is 2,800 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.

Answer 1

Solution 1:

Sales Budget - Jessi Corporation
Particulars	Q1	Q2	Q3	Q4	Total
Budgeted unit sales	13000	14000	16000	15000	58000
Selling price per unit	$29.00	$29.00	$29.00	$29.00	$29.00
Budgeted Sales	$377,000.00	$406,000.00	$464,000.00	$435,000.00	$1,682,000.00

Solution 2:

Schedule of Expected cash colleciton
Particulars	Q1	Q2	Q3	Q4	Total
Beginning accounts receivables	$74,200.00				$74,200.00
Collection of Q1 Sales	$245,050.00	$113,100.00			$358,150.00
Collection of Q2 Sales		$263,900.00	$121,800.00		$385,700.00
Collection of Q3 Sales			$301,600.00	$139,200.00	$440,800.00
Collection of Q4 Sales				$282,750.00	$282,750.00
Total Cash Collections	$319,250.00	$377,000.00	$423,400.00	$421,950.00	$1,541,600.00

Solution 3:

Production Budget - Jessi Corporation
Particulars	Q1	Q2	Q3	Q4	Total
Budgeted unit sales	13000	14000	16000	15000	58000
Add: Desired ending inventory (20% of next quarter sales)	2800	3200	3000	2800	2800
Total needs	15800	17200	19000	17800	60800
Less: Beginning inventory	2600	2800	3200	3000	2600
Budgeted production units	13200	14400	15800	14800	58200