Question

The marketing department of fiscal year (all sales are on account) Jessi Corporation has submitted the following sales forecast for the upcoming 1st Quarter 11,200 2nd Quarter 12,200 3rd Quarter 14,200 4th Quarter 13,200 Budgeted unit sales 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-a. Complete the company's sales budget. Jessi Corporation Sales Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Budgeted units sales Selling price per unit Total sales

Answer 1

1-a.

Jessi Corporation

Sales Budget

	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
Total sales	$123,200	$134,200	$156,200	$145,200	$558,800

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Jessi Corpoartion

Schedule of Expected Cash Collections

	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Year
Beginning accounts receivable	$70,600				$70,600
1st Quarter sales	$80,080 ($123,200*65%)	$36,960 ($123,200*30%)			$117,040
2nd Quarter sales		$87,230 ($134,200*65%)	$40,260 ($134,200*30%)		$127,490
3rd Quarter sales			$101,530 ($156,200*65%)	$46,860 ($156,200*30%)	$148,390
4th Quarter sales				$94,380 ($145,200*65%)	$94,380
Total cash collections	$150,680	$124,190	$141,790	$141,240	$557,900

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Jessi Corporation

Production Budget

	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 units	1,830 (12,200*15%)	2,130 (14,200*15%)	1,980 (13,200*15%)	1,880	1,880
Total needs	13,030	14,330	16,180	15,080	52,680
Beginning inventory units	(1,680)	(1,830)	(2,130)	(1,980)	(1,680)
Required production in units	11,350	12,500	14,050	13,100	51,000