DATA

YEAR 1 YEAR 2

Q1 Q2 Q3 Q4 Q1 Q2

Budgeted unit sales 4,000 7,000 8,000 9,000 5,000 6,000

Selling price per unit $6 per unit

Accounts receivable, beginning balance $6,500

Sales collected in the same quarter 60%

Sales collected one quarter later 40%

Desired ending finished goods inventor is 20% of the budgeted unit sales of the next quarter

Finished goods inventory, beginning 800 units

Raw materials required to produce one unit 5 kilograms

Desired ending inventory of raw materials 10% of next quarter's production needs

Raw materials inventory, beginning 2,300 kilograms

Raw material costs $2.00 per kilogram

Raw materials purchases are paid: 70% in the same quarter

30% one quarter later

Accounts payable for raw materials, beginning balance $8,150

Construct the sales budget YEAR 1 YEAR 2

Q1 Q2 Q3 Q4 Q1 Q2

Budgeted unit sales

Selling price per unit $8

Total sales

Construct the schedule of cash collections YEAR 1

Q1 Q2 Q3 Q4 YEAR

Accounts receivable, beginning balance

Collected in the same quarter 75%

Collected one quarter later 25%

Total cash collections

Calculate the accounts receivable at the end of Year 1