a) prepare sales budget for the third quarter of 2021 (by month and in total for the quarter)

b) prepare schedule of expected cash collections for the third quarter of 2021 (by month and in total for the quarter)

Jackson Company Jackson Company (JC) is a small merchandising business. The retail industry in which JC operates is highly competitive. Small and mid-sized retailers are increasingly taking market share from larger players. Organizational operations and sales in this industry are influenced by seasonality and short-term trends. JC intends to expand its activities and become an industry leader in the near future. For this reason, the executives at JC want assurance that the company is in a strategic, operational, and financial position to achieve its expansion goals. Your team was hired to create a master budget for the third quarter of fiscal 2021 and to provide IC's executives with data and recommendations in order for them to make informed managerial decisions related to the preparing for the expansion. The accounting department at JC established the financial statements for the second fiscal quarter of 2021 (April, May, June) that just ended, and presented the balance sheet to JC's executives, together with forecasted data for the third quarter of 2021 (July, August, September). The company's balance sheet at the end of the second quarter of 2021 is shown below: Jackson Company Balance Sheet at June 30, 2021 han Assets Cash $70,000 Accounts Receivable 125,900 Inventory 52,000 Fixed Assets (Net) 200,000 (c) Abra Total Assets $447,100 Liabilities and Shareholder's Equity Accounts Payable $61,100 Common Shares 300,000 Retained Earnings 86,000 Total Liabilities and Shareholder's Equity $447,100 The accounting team at JC provides you with the following additional data: 1. Estimated sales for the months of July 2021 through October 2021 respectively are: $200,000, $220,000, $210,000, and $230,000. 2. Historical data indicates that 10% of sales each month are cash sales while the rest are credit sales. The company does not offer any cash discount for early payment. The collection pattern for credit sales is 30% are collected in the month of sale and 70% are collected in the month following the month of the sale. The company does not have any uncollectible sales.3. Cost of goods sold (or cost of gm to be sold} is T5541 of sales. 4. The inventory policy is based on the dollar amount of cost of goods {to be] sold instead of being based on a number of units sold. Each month's desired ending inventory must be equal to SIDE-i. of the next month's dollar amount of eost of goods {to be} sold. 5. The company pays for 50% of its merchandise purchases in the month of the purchase and the remaining lm: in the month following the month of purchase. t5. Monthly general and administrative expenses are $65tlll which includes $T,tlll-ll in depreciation expense. All general and administrative expenses are paid in the month that they are incurred. T. The company plans to pay $3,0-ll in dividends in September, Bill] and to purchase capital assets eosting $9tl,ll in July, 2|]? 1. Payment for the capital assets will be evenly disbursed over the 2 months immediately following the month of purchase. 3. Covenants eontained in the lending agreement with their bank requires IE to maintain a minimum monthly ending cash balance of $5 ll,tlll. Currently... lC has access to a revolving line-of-credit from another lender for $15, {none of which has been used as of lune 3t], 21111, as shown in the balanee sheet at this date]. The monthly line of credit interest rate is 2.5%. Any required borrowing is assumed to own at the start of the month in which said borrowing is needed. Principal repayments on the line of credit are made at the end ofthe month with any cash uids that JC has that exceed the minimum required balance that month. Interest is charged to It: by the lender based on the principal amount owing (cumulated amount borrowed} at the end of the month. The interest on the principal amount owing on the line oferedit at the end of a month is aeciued in JC's books at the end of that month and is paid by JC the following month