Swifty Corporation estimates its sales at 210000 units in the first quarter and that sales will increase by 21000 units each quarter overthe year. They have, and desire, a 25% ending inventory of finished goods. Each unit sells for $25.40% of the sales are for cash, 70% ofthe credit customers pay within the quarter. The remainder is received in the quarter following sale.Cash collections for the third quarter are budgeted atO $7182000O $3559500.O $6205500.O $5166000.

Cash collection refers to an amount collected from the sale of goods or rendering services to the…

Answered: Swifty Corporation estimates its sales…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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The marketing department of Jessi Corporation submitted the following sales forecast for next year (all sales are on account): 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 11,800 12,800 14,800 13,800 Budgeted unit sales The selling price of the company's product is $17 per unit. Management expects to collect 65% of sales in the quarter in which the sales are made and 30% in the following quarter; 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 $71,800. The company expects to start the first quarter with 1,770 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 1,970 units. Required: 1. Calculate the estimated sales for each quarter and for the year as a whole. 2. Calculate the expected cash collections…
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