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 13,000 Budgeted unit sales 2nd Quarter 3rd Quarter 4th Quarter 14,000 16,000 15.000 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. Required 1 Required 2 Required 3 Calculate the estimated sales for each quarter of the fiscal year and for the year as a whole. 1st Quarter 5 377,000 2nd Quarter $ 406,000 3rd Quarter $ 464,000 4th Quarter $ 435,000 Year $1,682,000 Total sales Required 2 >

Answer 1

	Jessi Corporation
	Sales Budget
1)		Quarter 1	Quarter 2	Quarter 3	Quarter 4	Year
	Sales(Units)=(A)	13000	14000	16000	15000	58000
	per unit selling price=(B)	$                      29.00	$                      29.00	$                     29.00	$                      29.00	$                29.00
	Total Sales=(A)*(B)	$          3,77,000.00	$          4,06,000.00	$         4,64,000.00	$          4,35,000.00	$ 16,82,000.00
			Jessi Corporation
			Schedule of expected cash collection
2)		Quarter 1	Quarter 2	Quarter 3	Quarter 4	Year
	Accounts Receivable	$              74,200.00				$       74,200.00
	Quarter 1 Sales	$          2,45,050.00	$          1,13,100.00			$    3,58,150.00
	Quarter 2 Sales		$          2,63,900.00	$         1,21,800.00		$    3,85,700.00
	Quarter 3 Sales			$         3,01,600.00	$          1,39,200.00	$    4,40,800.00
	Quarter 4 Sales				$          2,82,750.00	$    2,82,750.00
	Total Cash collection	$          3,19,250.00	$          3,77,000.00	$         4,23,400.00	$          4,21,950.00	$ 15,41,600.00
		Quarter 1	Quarter 2	Quarter 3	Quarter 4
	Accounts Receivable	$              74,200.00
	Quarter 1 Sales	$377000*65%	$377000*30%
	Quarter 2 Sales		($406000*65%)	($406000*30%)
	Quarter 3 Sales			($464000*65%)	($464000*30%
	Quarter 4 Sales				($435000*65%)
			Jessi Corporation
3)			Production Budget
		Quarter 1	Quarter 2	Quarter 3	Quarter 4	Year
	Units Sales=(A)	13000	14000	16000	15000	58000
	Add: Ending Inventory=(B)	2800	3200	3000	2800	2800
	Total Needs=(C )=(A)+(B)	15800	17200	19000	17800	60800
	Less: Beginning Inventory=(D)	2600	2800	3200	3000	2600
	Production(Units)=(C )-(D)	13200	14400	15800	14800	58200
		Ending Inventory	Beginning Inventory
	Quarter 1	(14000*20%)	2600
	Quarter 2	(16000*20%)	(14000*20%)
	Quarter 3	(15000*20%)	(16000*20%)
	Quarter 4 (given)	2800	(15000*20%)