CVVUI R u uuicu Help Dimsdale Sports, a merchandising company, reports the following balance sheet at December 31. DIMSDALE SPORTS COMPANY Balance Sheet December 31 Assets Cash $ 36,000 Accounts receivable 525,000 Inventory 150,000 Equipment $ 540.000 Less: Accumulated depreciation 67,500 472,500 Total assets $1,183,500 Liabilities and Equity Liabilities Accounts payable $ 360,000 Loan payable 15,000 Taxes payable (due March 15) 90,000 $ 465,000 Equity Common stock $ 472,500 Retained earnings 246,000 718,500 Total liabilities and equity $ 1,183,500 To prepare a master budget for January, February, and March, use the following information. The company's single product is purchased for $30 per unit and resold for $55 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, 7,000 units; February, 9,000 units; March, 11,000 units; and April, 10,000 units. All sales are on credit. . Cash receipts from sales are budgeted as follows: January, $221,250; February, $697,000; March, $489,500. . Cash payments for merchandise purchases are budgeted as follows: January, $80,000; February. $302,800; March, $147,600. . Sales commissions equal to 20% of sales dollars are paid each month. Sales salaries (excluding commissions) are $5,000 per month. . General and administrative salaries are $12,000 per month. Maintenance expense equals $2,000 per month and is paid in cash. New equipment purchases are budgeted as follows: January, $36,000; February, $96,000; and March, $28,800. Budgeted depreciation expense is January, $6,000; February. $7,000; and March, $7,300. 'I'L- _________ I..._l__;._ _ I____I _..__I____ -1. LL ___l _r|'___l_ -1. _ ___J. _z d-al-A AAA A..I_:_I_ _..:II I__ __:_l ...u.|_ ___I_ __ LL I__'. _l_.. _.ELI__ CVVUI R u uuicu Help month. e. General and administrative salaries are $12,000 per month. Maintenance expense equals $2,000 per month and is paid in cash. f. New equipment purchases are budgeted as follows: January, $36,000; February, $96,000; and March, $28,800. Budgeted depreciation expense is January, $6,000; February, $7,000; and March, $7,300. 9. The company budgets a land purchase 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 an agreement with its bank to obtain additional loans as needed. The interest rate is 1% per month and interest is paid at each monthend 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 $25,000 at the end of each month. i. The income tax rate for the company is 40%. Income taxes on the rst quarter's income will not be paid until 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 Sales budgets. Help on wcu CVVUI R u D. Lapltal EXPEHGIIUI'ES DUOgeIS. 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 Sales budgets. Budgeted sales units Selling price per unit Total budgeted sales Help on wcu CVVUI R u b. Lapltal expenditures DUOgeIS. 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. Next period budgeted sales units Ratio of inventory to future sales Desired ending inventory units Total requird units Units to be purchased Cost of merchandise purchases 5. Capital expenditures buagets. 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 Selling expense budgets. DIMSDALE SPORTS Selling Expense Budget January February March Budgeted sales Sales commission percent Sales commissions Sales salaries Total selling expenses Required 2 Required 4 > 5. Capital expenditures buagets. 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 General and administrative expense budgets. Hint: Depreciation is included in the general and administrative budget for merchandisers. DIMSDALE SPORTS General and Administrative Expense Budget January February March Total General and administrative salaries Maintenance Depreciation Total general and administrative expenses Help on wcu CVVUI R u D. Lapltal expenditures DUOgeIS. 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. Equipment purchases _ Land purchase _ Total capital expenditures Help on wcu CVVUI R u b. Lapltal expenditures DUOgeIS. 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 Cash budgets. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign.) Total cash available Less: Cash payments for: Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 Budgeted income statement for entire quarter (not monthly) ended March 31. DIMSDALE SPORTS COMPANY Budgeted Income Statement For Three Months Ended March 31 Selling, general and administrative expenses Total operating expenses $ 0 -J - DIMSDALE SPORTS COMPANY Budgeted Balance Sheet March 31 Assets Total assets Liabilities and Equity Liabilities 0 Equity 0 Total Liabilities and Equity