The marketing department of Jessi Corporation has submitted the following sales
ID: 2434986 • Letter: T
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 4th Quarter
Budgeted unit sales 11,000 13,000 14,000 14,000
The selling price of the company's product is $18 per unit. Management expects to collect 61% of sales in the quarter in which the sales are made, 27% in the following quarter, and 12% 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 $66,200.
The company expects to start the first quarter with 1,550 units in finished goods inventory. Management desires an ending finished goods inventory in each quarter equal to 15% of the next quarter's budgeted sales. The desired ending finished goods inventory for the fourth quarter is 1,790 units.
Requirement 1:
(a) Prepare the company's sales budget. (Omit the "$" sign in your response.)
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year
Total sales $ $ $ $ $
(b) Prepare the schedule of expected cash collections. (Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)
Jessi Corporation
Schedule of Expected Cash Collections
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year
Accounts receivable,
beginning balance $ $ $ $ $
1st Quarter sales
2nd Quarter sales
3rd Quarter sales
4th Quarter sales
Total cash collections $ $ $ $ $
Requirement 2:
Prepare the company's production budget for the upcoming fiscal year. (Input all amounts as positive values.)
Jessi Corporation
Production Budget
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year
Budgeted unit sales
Add desired ending inventory
Total units needed
Less beginning inventory
Required production
Explanation / Answer
Requirement 1: (a) Prepare the company's sales budget. (Omit the "$" sign in your response.) 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Sales (in Units) 11,000 13,000 14,000 14,000 Selling Price $18 $18 $18 $18 Total sales $198,000 $234,000 $252,000 $252,000 $936,000 (b) Prepare the schedule of expected cash collections. (Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.) Jessi Corporation Schedule of Expected Cash Collections 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Accounts receivable beginning balance $66,200 $ $ $ $66,200 1st Quarter sales 120,780 53,460 23,760 198,000 2nd Quarter sales 142,740 63,180 28,080 234,000 3rd Quarter sales 153,720 68,040 221,760 4th Quarter sales 153,720 153,720 Total cash collections $186,980 $196,200 $240,660 $249,840 $873,680 Requirement 2: Prepare the company's production budget for the upcoming fiscal year. (Input all amounts as positive values.) Jessi Corporation Production Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Budgeted unit sales 11,000 13,000 14,000 14,000 52,000 Add desired ending inventory 1,950 2,100 2,100 1,790 1,790 Total units needed 12,950 15,100 16,100 15,790 53,790 Less beginning inventory 1,550 1,950 2,100 2,100 1,550 Required production 11,400 13,150 14,000 13,690 52,240
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