1. Sales Budget and Expected Cash Collections : The marketing department of Jess
ID: 2763170 • Letter: 1
Question
1. Sales Budget and Expected Cash Collections: The marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal year (all sales are on account):
The selling price of the company’s product is $18.00 per unit. Management expects to collect 65% of sales in the quarter in which the sales are made, 30% 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 $70,200. Prepare the company’s sales budget and schedule of expected cash collections.
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Budgeted unit sales 11,000Explanation / Answer
SALES BUDGET Sales No. Of unit sell price per unit(in $) Amount (in $) Begining balance expencted to be collected in first qtr 65% collected in the same month 30% in next Quarter 5% in next to next Total Collection Quarter 1 11000 18 198000 70200 128700 198900 Quarter 2 12000 18 216000 140400 59400 199800 Quarter3 14000 18 252000 163800 64800 9900 238500 Quarter4 13000 18 234000 152100 75600 10800 238500 Total 875700
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