The marketing department of Kyle Corporation has submitted the following sales forecast for the upcoming fiscal year:     1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Budgeted sales (units) 8,800 10,800 12,800 11,800     The selling price of the company’s product is $28 per unit. Management expects to collect 60% of sales in the quarter in which the sales are made and 35% in the following quarter; 5% of sales are expected to be uncollectible. The beginning balance of accounts receivable, all of which are expected to be collected in the first quarter, is $88,500.   The company expects to start the first quarter with 2,400 units in finished goods inventory. Management desires an ending finished goods inventory in each quarter equal to 15% of the next quarter’s budgeted sales. The desired ending finished goods inventory for the fourth quarter is 2,650 units.   Required: 1-a. Prepare the company's sales budget.     1-b. Prepare the schedule of expected cash collections.     2. Prepare the company's production budget for the upcoming fiscal year.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The marketing department of Kyle Corporation has submitted the following sales forecast for the upcoming fiscal year:

 

  1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Budgeted sales (units) 8,800 10,800 12,800 11,800
 

 

The selling price of the company’s product is $28 per unit. Management expects to collect 60% of sales in the quarter in which the sales are made and 35% in the following quarter; 5% of sales are expected to be uncollectible. The beginning balance of accounts receivable, all of which are expected to be collected in the first quarter, is $88,500.

 

The company expects to start the first quarter with 2,400 units in finished goods inventory. Management desires an ending finished goods inventory in each quarter equal to 15% of the next quarter’s budgeted sales. The desired ending finished goods inventory for the fourth quarter is 2,650 units.

 

Required:

1-a. Prepare the company's sales budget.

 

 

1-b. Prepare the schedule of expected cash collections.

 

 

2. Prepare the company's production budget for the upcoming fiscal year.

 

 
 
 
 
 
 
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