The marketing department of Jessi Corporation has submitted the following sales

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 11,700 2nd Quarter 12,700 3rd Quarter 14,700 4th Quarter 13,700 Budgeted unit sales The selling price of the company's product is $16 per unit. Management expects to collect 75% of sales in the quarter in which the sales are made, 20% in the folowing 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 $71,600. The company expects to start the first quarter with 1,755 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 1,955 units.

Explanation / Answer

1st quarter 2nd quarter 3rd quarter 4th quarter Year Beginning accounts receivable 71600 71600 1st quarter sales 140400 37440 177840 2nd quarter sales 152400 40640 193040 3rd quarter sales 176400 47040 223440 4th quarter sales 164400 164400 Total cash collections 212000 189840 217040 211440 830320

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