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 11,900 12,900 3rd Quarter 4th Quarter 14,900 13,900 Budgeted unit sales The selling price of the company's product is $18 per unit. Management expects to collect 75% of sales in the quarter in which the sales are made, 20% 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 $72,000. The company expects to start the first quarter with 1,785 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 1,985 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.

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 11,900 12,900 3rd Quarter 4th Quarter 14,900 13,900 Budgeted unit sales The selling price of the company's product is $18 per unit. Management expects to collect 75% of sales in the quarter in which the sales are made, 20% 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 $72,000. The company expects to start the first quarter with 1,785 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 1,985 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.

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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Concept explainers

Master Budget

A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.

Sales Budget and Selling

A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.

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
11,900
12,900
Budgeted unit sales.
The selling price of the company's product is $18 per unit. Management expects to collect 75% of sales in the quarter in
which the sales are made, 20% 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 $72,000.
The company expects to start the first quarter with 1,785 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 1,985 units.
Required 1 Required 2
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.
3rd Quarter 4th Quarter
14,900
13,900
Total sales
Required 3
Calculate the estimated sales for each quarter of the fiscal year and for the year as a whole.
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
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quarter of the fiscal
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 v
3. Calculate the required production in units of finished goods for each quarter of the fiscal year and
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Required 3
Calculate the expected cash collections for each quarter of the fiscal year and for the year as a whole.
3rd Quarter
Total cash collections
1st Quarter 2nd Quarter
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