Bered Dimsdale Sports, a merchandising company reports the following balance sheet at December 31 DIMSDALE SPORTS COMPANY Balance Sheet December 31 Assets Cash $ 22,000 Accounts receivable 520,000 Inventory 150,000 Equipment 5 648,000 Less: Accumulated depreciation 81.000 Equipment, net 567,000 Total assets $ 1,259,000 Liabilities and Equity Llabilities Accounts payable $ 355,000 Loan payable 12, eee Taxes payable (due March 15) 89,000 $ 456,000 Equity Common stock 5 473,000 Retained earnings 330,000 Total stockholders equity Se3,000 Total liabilities and equity $ 1,259,000 To prepare a master budget for January, February, and March, use the following information a. The company's single product is purchased for $30 per unit and resold for $56 per unit. The inventory level of 5,000 units on December 31 is more than management's desired level, which is 20% of the next month's budgeted sales units. Budgeted sales are January 7.250 units, February, 8750 units, March 10,750 units, and April 10,000 units. All sales are on credit b. Cash receipts from sales are budgeted as follows: January, S262,100, February, 727.201 March, $506,814 c. Cash payments for merchandise purchases are budgeted as follows January $60,000. February, $319,000 March, $150,900 d. Sales commissions equal to 20% of sales dollars are paid each month Sales salaries (excluding commissions) are $4,500 per month e. General and administrative salaries are $12.000 per month Maintenance expense equals $1,800 per month and is paid in cash New equipment purchases are budgeted as follows: January, $38,400, February, 593,600, and March, 524,000. Budgeted depreciation expense is January, $ 7150: February, $8,125, and March, $8,375 g. The company budgets a land purchase at the end of March at a cost of $170,000, which will be paid with cash on the last day of the month n. The company has an agreement with its bank to obtain additional loans as needed. The interest rate is 1% per month and interest is paid at each month-end based on the beginning-month balance. Partial or full payments on these loans are made on the last day of the month. The company maintains a minimum ending cash balance of $22,000 at the end of each month. The income tax rate for the company is 41%. Income taxes on the first quarter's income will not be paid until April 15 Wald April 15 Required: Prepare a master budget for the months of January, February, and March that has the following budgets 1. Sales budgets 2. Merchandise purchases budgets. 3. Selling expense budgets. 4. General and administrative expense budgets. Hint: Depreciation is included in the general and administrative budget for merchandisers 5. Capital expenditures budgets. 6. Cash budgets 7. Budgeted income statement for entire quarter (not monthly) ended March 31 8. Budgeted balance sheet as of March 31. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 Merchandise purchases budgets. DIMSDALE SPORTS Merchandise Purchases Budget January February March Budgeted sales units Calculation of Desired ending inventory Next period budgeted sales units Ratio of inventory to future sales Less Beginning inventory units Total required units Less Beginning inventory units Units to be purchased Cost per und Cast of merchandise purchases 7. Budgeted Income statement for entire quarter (not monthly) ended March 31. 8. Budgeted balance sheet as of March 31 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 Selling expense budgets. DIMSDALE SPORTS Selling Expense Budget January February March Budgeted sales Sales commission percent Sales commissions Sales salaries Total selling expenses Prey Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Re General and administrative expense budgets. Hint: Depreciation is included in the general and administra merchandisers. March Total DIMSDALE SPORTS General and Administrative Expense Budget January February General and administrative salaries Depreciation Maintenance Total gen and admin. expenses w 5. Capital expenditures budgets, 6. Cash budgets. 7. Budgeted Income statement for entire quarter (not monthly) ended March 31. 8. Budgeted balance sheet as of March 31. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 Capital expenditures budgets. DIMSDALE SPORTS Capital Expenditures Budget January February March Equipment purchases Land purchase Total capital expenditures N Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Require Cash budgets. (Negative balances and Loan repayment amounts (if any) should be indicated answers to the nearest whole dollar.) DIMSDALE SPORTS CO. Cash Budget January February March Beginning cash balance Total cash available Less: Cash payments for Merchandise purchases Sales salaries General & administrative salaries Maintenance Purchases of equipment Purchase of land Taxes Loan interest Total cash payments Preliminary cash balance Additional loan (loan repayment) Ending cash balance 0 0 Loan balance January February March Loan balance - Beginning of month Additional loan (loan repayment) Loan balance End of month Budgeted income statement for the entire first quarter (not for each month).( dollar.) DIMSDALE SPORTS CO: Budgeted Income Statement For Three Months Ended March 31 Sales Cost of goods sold Gross profit Selling, general and administrative expenses Sales commissions expense Sales salaries expense General administrative salaries expense Maintenance expense Depreciation expense Loan interest expense Total operating expenses 0 Income before income taxes 0 Net income $