Exercise 7-2 (1) - Exercise 7-2(45 minutes(LO2 CC5 6 Jessi...

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Unformatted text preview: Exercise 7-2 (45 minutes) (LO2 CC5, 6) Jessi Corporation 1. Sales Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Budgeted unit sales .............................................................................. 8,000 10,000 12,000 11,000 41,000 Selling price per unit ............................................................................. × $20.00 × $20.00 × $20.00 × $20.00 × $20.00 Total sales ........................................................................................... $160,000 $200000 $240,000 $220,000 $820,000 Schedule of Expected Cash Collections Accounts receivable, beginning balance ............................................................................. $ 80,500 $ 80,500 st 1 Quarter sales: $160,000 × 65%, 30% ................................................................................................ 104,000 $ 48,000 152,000 nd 2 Quarter sales: $200,000 × 65%, 30% ................................................................................................ 130,000 $ 60,000 190,000 rd 3 Quarter sales: $240,000 × 65%, 30% ................................................................................................ 156,000 $ 72,000 228,000 th 4 Quarter sales: $220,000 × 65% .............................................................................. 143,000 143,000 Total cash collections ............................................................................ $184,500 $178,000 $216,000 $215,000 $793,500 Exercise 7-2 (continued) 2. Jessi Corporation Production Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Budgeted sales (units) .............................................................................................. 8,000 10,000 12,000 11,000 41,000 Add desired ending inventory .......................................................................................... 1,500 1,800 1,650 2,250 2,250 Total units needed................................................................................ 9,500 11,800 13,650 13,250 43,250 Less beginning inventory .......................................................................................... 2,000 1,500 1,800 1,650 2,000 Required production ............................................................................. 7,500 10,300 11,850 11,600 41,250...
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