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As the Head of Accounting at Big Bad Bikes Sports chain of 10 stores, the Marketing Director has handed you his sales forecast for
As the Head of Accounting at Big Bad Bikes Sports chain of 10 stores, the Marketing Director has handed you his sales forecast for 2022, so that you can prepare your sales budget for the year for the two types of models that the company manufactures in-house and sells in its stores and to wholesalers. Quarter 1 Quarter 2 Quarter 3 Quarter 4 Cyclone 100 300 700 350 Trek 300 550 200 100 Racer Total 400 850 900 450 Assumptions The inventory policy is to keep 10% of the current quarter's inventory as the ending inventory (equally distributed for each model of bike) for that quarter (the beginning inventory of the next quarter). There were 180 bikes in the beginning inventory in Q1. Selling Price = Cyclone = $250, Trek Racer = $400, Schedule of Cash Collections = 85% of sales per quarter is in cash, 15% in credit collected in the next quarter Accounts receivable on January 1st = $10,000 Sales in Q4 of 2021 amounted to $100,000 Calculate the sales budget including the cash collections for Big Bad Bikes for each quarter of 2022. Indicate how much cash that the company has on hand at the end of each quarter.
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