Exercise (Algo) Cash Budget Analysis [LO8-8]

A cash budget, by quarters, is given below for a retail company (000 omitted). The company requires a minimum cash balance of at least $8,000 to start each quarter. Fill in the missing amounts. (Enter your answers in thousands of dollars. Cash deficiencies and Repayments should be indicated by a minus sign.)

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Exercise (Algo) Sales and Production Budgets [LO8-2, LO8-3]

The marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal year (all sales are on account):

	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter
Budgeted unit sales	11,600	12,600	14,600	13,600

The selling price of the companys product is $15 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 $71,400.

The company expects to start the first quarter with 1,740 units in finished goods inventory. Management desires an ending finished goods inventory in each quarter equal to 15% of the next quarters budgeted sales. The desired ending finished goods inventory for the fourth quarter is 1,940 units.

Required:

1. Calculate the estimated sales for each quarter of the fiscal year and for the year as a whole.

2. Calculate the expected cash collections for each quarter of the fiscal year and for the year as a whole.

3. Calculate the required production in units of finished goods for each quarter of the fiscal year and for the year as a whole.

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