Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Check Problem 22-8AA Merchandising: Preparation of a complete master budget LO P4 Near the end of 2017, the management of Dimsdale Sports Co, a merchandising

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Check Problem 22-8AA Merchandising: Preparation of a complete master budget LO P4 Near the end of 2017, the management of Dimsdale Sports Co, a merchandising company. prepared the following estimated balance sheet for December 31, 2017. DIMSDALE SPORTS COMPANY Estimated Balance Sheet Assets 37,000 520,000 135,000 Cash Accounts receivable Inventory Total current assets Equipment Lessi accumulated depreciation $ 692,000 576,000 -23,000 Equipment, net Total assets 504,000 $1,196,000 Liabilities and Equity $350,000 14,000 89,000 Accounts payable Bank loan payable Taxes payable (due 3/15/2018) Total liabilities Common stock Retained earnings Total stockholders' equity Total liabilities and equity $ 453,000 73.500 $1,196,000 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 resold for $57 per unit. The expected inventory level of 4,500 units b. Cash sales and credit sales represent 25% and 75%, respectively, 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. 7.250 units: February, 9,500 units: March, 11,500 units; and April, 9,500 units. of total sales. Of the credit sales, 63% is collected in the first month after the month of sale an d 37% 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 $395.000 is collected in February Merchandise purchases are paid or as follows: 20% n the first month after the month of purchase and 80% in the second month after the month of purchase. For the December 31. 2017. accounts pavable balance. $65.000 is oaid in January and the remainina c ?Prev 1 of 1ll? Next >

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing A Business Risk Approach

Authors: Larry E. Rittenberg, Karla Johnstone, Audrey Gramling

7th Edition

0324663722, 978-0324663723

More Books

Students also viewed these Accounting questions