Assests Cash Accounts receivable Inventory Total current assets Equipment Less: Accumulated depreciation Equipment, net Total assets DIMSDALE SPORTS COMPANY Estimated Balance Sheet December 31, 2017 Liabilities and Equity $ 36,000 Accounts payable $360.000 525,000 Bank loan payable 15.000 150.000 Taxes payable (due 3/15/2018) 90.000 $ 711.000 Total liabilities 540.000 Common stock 4721500 67.500 Retained earnings 1.246.000 472.500 Total stockholders' equity $1,183,500 Total liabilities and equity S465.000 218.500 ST.183.500 To prepare a master budget for January. February, and March of 2018, management gathers the following information. a. The company's single product is purchased for $30 per unit and resolfor $55 per unit. The expected inventory level of 5.000 units on December 31, 2017. is more than management's desired level, which is 20% of the next month's expected sales (in units). Expected sales are. January, 7.000 units: February. 9.000 units: March. 11.000 units: and April, 10.000 units b. Cash sales and credit sales represent 25% and 75%6. respectively. of total sales. Of the credit sales. 60is collected in the first month after the month of sale and 10% in the second month after the month of sale. For the December 31, 2017. accounts receivable balance. $125.000 is collected in January and the remaining $400.000 is collected in February c. Merchandise purchases are paid for as follows: 20% in the first month after the month of purchase and so in the second month after the month of purchase. For the December 31, 2017. accounts payable balance. ss0.000 is paid in January 2018 and the remaining $250.000 is paid in February 2013! d. Sales commissions equal to 20 of sales are paid ench month. Sales salaries (excluding commissions are $60.000 per year. e. General and administrative salaries are $144.000 per year Maintenance expense equals $2.000 per month and is paid in cash f. Equipment reported in the Deceniber 31, 2017. balance sheet was purchased in January 2017 It is being depreciated over eight years under the straight-line method with no salvage value. The following amounts for new equipment purchases are planned in the coming quarter: January $36,000. February, 196.000 and March 20.000 This equipment will be deprecinted under the straight-line method over eight years with no salvage value A full months depreciation is taken for the month in which f. Equipment reported in the December 31, 2017, balance sheet was purchased in January 2017. It is being depreciated over eight years under the straight-line method with no salvage value. The following amounts for new equipment purchases are planned in the coming quarter: January, $36,000, February, $96,000; and March, $28.800. This equipment will be depreciated under the straight-line method over eight years with no salvage value. A full month's depreciation is taken for the month in which equipment is purchased. Page 928 g. The company plans to buy land at the end of March at a cost of $150.000, which will be paid with cash on the last day of the month h. The company has a working arrangement with its bank to obtain additional loans as needed. The interest rate is 12% per year. and interest is paid at each month-end based on the beginning balance. Partial or full payments on these loans can be made on the last day of the month. The company has agreed to maintain a minimum ending cash balance of $25.000 at the end of each month. i. The income tax rate for the company is 40%. Income taxes on the first quarter's income will not be paid until April 15. Required Prepare a master budget for each of the first three months of 2013: include the following component budgets (show supporting calculations as needed, and round amounts to the nearest dollar): 1. Monthly sales budgets (showing both budgeted unit sales and dollar sales). 2. Monthly merchandise purchases budgets. Check (2) Budgeted purchases: January, $114,000 February 5282.000 3. Monthly selling expense budgets. (3) Budgeted selling expenses: January $82,000. February $104005 4. Monthly general and administrative expense budgets 5. Monthly capital expenditures budgets 6. Monthly cash budgets. (6) Ending cashbat! January $30.100. February, $ 210.306 7. Budgeted income statement for the entire first quarter not for each month) 8. Budgeted balance sheet as of March 31. 2018. 81 Budgeted total assets at March 3 $1.5681650 99 00 01 Dimsdale Sports Co Budgeted Income Statement For the Quarter ended March 31, 2018 03 04 05 06 07 08 10 12 16 19 20 1 Budgeted Balance Sheet