Exercise 7-2 Preparing Sales and Production Budgets (LO2 - CC5, 6) The marketing department of Jessi Corporation has submitted the following sales forecast for the upcoming fiscal year: Budgeted sales (units) 1st Quarter 9,500 2nd Quarter 11,500 3rd Quarter 13,500 4th Quarter 12,500 The selling price of the company's product is $35 per unit. Management expects to collect 65% of sales in the quarter in which the sales are made and 30% 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 $95,500. The company expects to start the first quarter with 2,750 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 3,000 units. Required: 1-a.Prepare the company's sales budget. JESSI CORPORATION Sales Budget 2nd Quarter 3rd Quarter 1st Quarter 4th Quarter Year Total sales 1-b.Prepare the schedule of expected cash collections. JESSI CORPORATION Schedule of Expected Cash Collections 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Accounts receivable, beginning balance 1st Quarter sales 2nd Quarter sales 3rd Quarter sales 4th Quarter sales Total cash collections $ 0 $ 0 $ 0 $ 0 $ 0 2. Prepare the company's production budget for the upcoming fiscal year. JESSI CORPORATION Production Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Y ear Total units needed