Check my work 1 Problem 07-8AA Merchandising: Preparation of a complete master budget LO P4 References Near the end of 2019, the management of Dimsdale Sports Co, a merchandising company, prepared the following estimated balance sheet for December 31, 2019. DINSDALE SPORTS COMPANY Estimated Balance Sheet December 31, 2019 Assets Cash $. 36,000 Accounts receivable 520,000 Inventory 157.500 Total current annet $ 713,500 Equipment 612.000 Last Accumulated depreciation 76.500 Equipment, net 535,500 Total sota $1,249,000 Liabilities and Equity Accounts payable $375,000 Bank loan payabse 11,000 Taxes payable (due 3/15/2020) 22.000 Total liabilities $ 478.000 Common stock 470.000 Retained earning 301.000 Total stockholders' equity 721,000 Total liabilities and equity 51,249,000 To prepare a master budget for January, February, and March of 2020, management gathers the following Information Check my work 1 00 a. The company's single product is purchased for $30 per unit and resold for $57 per unit. The expected Inventory level of 5.250 units on December 31, 2019, is more than management's desired level which is 20% of the next month's expected sales in units) Expected sales are January 6,750 units: February. 9.000 units; March 11,250 units and April 10,500 units. b. Cash sales and credit sales represent 20% and 80%, respectively, of total sales. Of the credit sales. 61% is collected in the first month after the month of sale and 39% in the second month after the month of sale For the December 31, 2019, accounts receivable balance $120,000 is collected in January 2020 and the remaining $400,000 is collected in February 2020 c. Merchandise purchases are paid for as follows: 20% in the first month after the month of purchase and 80% in the second month after the month of purchase. For the December 31, 2019, accounts payable balance. $70,000 is paid in January 2020 and the remaining $305,000 is paid in February 2020 d. Sales commissions equal to 20% of sales are paid each month. Sales salaries (excluding commissions) are $66.000 per year e. General and administrative salaries are $144,000 per year. Maintenance expense equals $2.000 per month and is paid in cash 1. Equipment reported in the December 31, 2019, balance sheet was purchased in January 2019. 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, 531,200: February, 5100,800, and March, 28,800. This equipment will be depreciated under the straight line method over eight years with no salvage value. Au month's foreciation is taken for the month in which equipment is purchased g. The company plans to buy land at the end of March at a cost of $170,000, 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 $19,000 at the end of each month The income tax rate for the company is 39%. 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 2020: include the following component budgets. 1. Monthly sales budgets. 2. Monthly merchandise purchases budgets. 3. Monthly selting expense budgets 4. Monthly general and administrative expense budgets. 5. Monthly capital expenditures budocts 1 M Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 6 Calc Cash Bud Required 7 Required 8 Monthly sales budgets. DIMSDALE SPORTS CO. Sales Budget For January, February, and March 2020 Budgeted Unit Budgeted Budgeted Total Sales Unit Price Dollars January 6,750 $ 57 February 9,000 March 11,250 Totals for the quarter 27,000 Required Required 2 > 1 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 required 4 Required Required 6 Required 6 Calc Cash Bud Required 7 Required B 40 points Monthly merchandise purchases budgets. Book + Print References DIMSDALE SPORTS CO. Merchandise Purchases Budget January, February, and March 2020 January February 9,000 11.250 20% 20% 1,800 2,250 March 10,500 20% 2,100 Next month's budgeted sales (units) Ratio of inventory to future sales Budgeted ending inventory (units) Budgeted units sales for month Required units of available merchandise Beginning inventory (units) Units to be purchased 1 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 6 Calc Cash Bud Required 7 Required B ht Monthly selling expense budgets. Book DIMSDALE SPORTS COMPANY Selling Expense Budget January, February, and March 2020 January February Print March ferences Budgeted sales Sales commission percent Sales commissions Sales salaries Total budgeted selling expenses your answers in the tabs below. Calc Required 7 Required 8 40 points Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 6 Cash Bud Monthly general and administrative expense budgets. February March Book January $ 612,000 Print Equipment - beginning of month Equipment purchases Equipment - end of month References DIMSDALE SPORTS CO. General and Administrative Expense Budget January, February, and March 2020 January February March Maintenance expense Salaries expense