Question

In: Accounting

1) Sales Budget and Expected Cash Collections The marketing department of Alex Corporation has submitted the...

1) Sales Budget and Expected Cash Collections

The marketing department of Alex 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

11,000

12,000

14,000

13,000

The selling price of the company’s product is $18.00 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 $70,200.

Required:

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

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

Solutions

Expert Solution

ekkarill92 answered 2 years ago
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