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Fortin Limited produces and sells a single product, a wearable LED light for runners and cyclists. The analytics group at Fortin Limite has developed the following estimates for unit sales in the upcoming year. Budgeted unit sales First Quarter 25,000 Second Quarter 22,200 Third Quarter Fourth Quarter 20,100 23,000 The light sells for $30 per unit and all sales are on account. 75% of sales are expected to be collected in the quarter of sale, with the remainder in the following quarter. Accounts receivable at the beginning of the quarter were $172,000 and will all be collected during the first quarter of the year. Required: 1-a. Prepare the company's sales budget. At the end of the previous quarter there were 2,300 units in finished goods inventory. The desired ending finished goods inventory at the end of each quarter is 10% of the next quarter's budgeted sales. Management expects sales in the fourth quarter of the upcoming year to be the same as the first quarter of the following year.

Fortin Limited produces and sells a single product, a wearable LED light for runners and cyclists. The analytics group at Fortin Limite has developed the following estimates for unit sales in the upcoming year. Budgeted unit sales First Quarter 25,000 Second Quarter 22,200 Third Quarter Fourth Quarter 20,100 23,000 The light sells for $30 per unit and all sales are on account. 75% of sales are expected to be collected in the quarter of sale, with the remainder in the following quarter. Accounts receivable at the beginning of the quarter were $172,000 and will all be collected during the first quarter of the year. Required: 1-a. Prepare the company's sales budget. At the end of the previous quarter there were 2,300 units in finished goods inventory. The desired ending finished goods inventory at the end of each quarter is 10% of the next quarter's budgeted sales. Management expects sales in the fourth quarter of the upcoming year to be the same as the first quarter of the following year.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Fortin Limited produces and sells a single product, a wearable LED light for runners and cyclists. The analytics group at Fortin Limited has developed the following estimates for unit sales in the upcoming year. Budgeted unit sales First Quarter 25,000 The light sells for $30 per unit and all sales are on account. 75% of sales are expected to be collected in the quarter of sale, with the remainder in the following quarter. Accounts receivable at the beginning of the quarter were $172,000 and will all be collected during the first quarter of the year. Required: 1-a. Prepare the company's sales budget. Budgeted unit sales Selling price per unit Total Sales Second Quarter Third Quarter 22,200 20,100 At the end of the previous quarter there were 2,300 units in finished goods inventory. The desired ending finished goods inventory at the end of each quarter is 10% of the next quarter's budgeted sales. Management expects sales in the fourth quarter of the upcoming year to be the same as the first quarter of the following year. First Quarter Fourth Quarter 23,000 Second Quarter Third Quarter Fourth Quarter Year
Transcribed Image Text:Fortin Limited produces and sells a single product, a wearable LED light for runners and cyclists. The analytics group at Fortin Limited has developed the following estimates for unit sales in the upcoming year. Budgeted unit sales First Quarter 25,000 The light sells for $30 per unit and all sales are on account. 75% of sales are expected to be collected in the quarter of sale, with the remainder in the following quarter. Accounts receivable at the beginning of the quarter were $172,000 and will all be collected during the first quarter of the year. Required: 1-a. Prepare the company's sales budget. Budgeted unit sales Selling price per unit Total Sales Second Quarter Third Quarter 22,200 20,100 At the end of the previous quarter there were 2,300 units in finished goods inventory. The desired ending finished goods inventory at the end of each quarter is 10% of the next quarter's budgeted sales. Management expects sales in the fourth quarter of the upcoming year to be the same as the first quarter of the following year. First Quarter Fourth Quarter 23,000 Second Quarter Third Quarter Fourth Quarter Year
1-b. Prepare the schedule of expected cash collections. Accounts receivable, beginning balance 1st Quarter sales 2nd Quarter sales 3rd Quarter sales 4th Quarter sales Total cash collections Budgeted unit sales search 3rd Quarter sales 4th Quarter sales Total cash collections 2. Prepare the company's production budget for the upcoming fiscal year. Budgeted unit sales Total units needed FORTIN LIMITED Schedule of Expected Cash Collections First Quarter HI Required production First Quarter 0 First Quarter $ FORTIN LIMITED Production Budget 0 Second Quarter 0 Second Quarter < Prev 0 $ 2. Prepare the company's production budget for the upcoming fiscal year. Third Quarter FORTIN LIMITED Production Budget 0 $ Second Quarter 0 0 Third Quarter 4 of 8 0 $ Third Quarter 0 $ Fourth Quarter ⠀ 0 0 Fourth Quarter 0 $ Year Next > 0 $ Fourth Quarter $ 0 0 Year 0 0 0 0 0 0 0 $ Year 0 0 U 0 0
Transcribed Image Text:1-b. Prepare the schedule of expected cash collections. Accounts receivable, beginning balance 1st Quarter sales 2nd Quarter sales 3rd Quarter sales 4th Quarter sales Total cash collections Budgeted unit sales search 3rd Quarter sales 4th Quarter sales Total cash collections 2. Prepare the company's production budget for the upcoming fiscal year. Budgeted unit sales Total units needed FORTIN LIMITED Schedule of Expected Cash Collections First Quarter HI Required production First Quarter 0 First Quarter $ FORTIN LIMITED Production Budget 0 Second Quarter 0 Second Quarter < Prev 0 $ 2. Prepare the company's production budget for the upcoming fiscal year. Third Quarter FORTIN LIMITED Production Budget 0 $ Second Quarter 0 0 Third Quarter 4 of 8 0 $ Third Quarter 0 $ Fourth Quarter ⠀ 0 0 Fourth Quarter 0 $ Year Next > 0 $ Fourth Quarter $ 0 0 Year 0 0 0 0 0 0 0 $ Year 0 0 U 0 0
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