December 31, 2017 $ 661,080 DIMSDALE SPORTS COMPANY Estimated Balance Sheet December 31, 2017 Assets Cash $ 36, eee Accounts receivable 52e, eee Inventory 105,000 Total current assets Equipment 540, eee Less: accumulated depreciation 67,58e Equipment, net Total assets Liabilities and Equity Accounts payable $ 37e.ee Bank loan payable 14.999 Taxes payable (due 3/15/2018) 90, eee Total liabilities Common stock 472. See Retained earnings 187,080 Total stockholders' equity Total liabilities and equity 472,500 $ 1,133,580 $ 474, 659,5ee $1,133,500 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 $20 per unit and resold for $52 per unit. The expected inventory level of 5,250 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. 6.500 units: February. 8.750 units; March 10.750 units, and April. 9.500 units. b. Cash sales and credit sales represent 25% and 75%, respectively, of total sales. Of the credit sales, 63% is collected in the first month after the month of sale and 37% in the second month after the month of sale. For the December 31, 2017, accounts receivable balance. $130.000 is collected in January and the remaining $390,000 is collected in February 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, 2017, accounts payable balance. $90.000 is paid in January and the remaining $280,000 is paid in February. d. Sales commissions equal to 20% of sales are paid each month. Sales salaries (excluding commissions) are $90.000 per year. e. General and administrative salaries are $156,000 per year. Maintenance expense equals $2.100 per month and is paid in cash. 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, $33,600; February, $93.600; and March, $26.400. 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. g. The company plans to buy land at the end of March at a cost of $175.000 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 $22.560 at the end of each month. 1. The income tax rate for the company is 37%. 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 2018: include the following component budgets: 1. Monthly sales budgets. 2. Monthly merchandise purchases budgets. 3. Monthly selling expense budgets. 4. Monthly general and administrative expense budgets. 5. Monthly capital expenditures budgets. 6. Monthly cash budgets, 7. Budgeted income statement for the entire first quarter (not for each month). 8. Budgeted balance sheet as of March 31, 2018. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Calc Required 6 Cash Bud Required 7 Required 8 Calculate the budgeted cash receipts and cash payments. (Negative values should be indicated with minus sign. Round your final answers to the nearest whole dollar.) Calculation of Cash receipts from customers: January February March Sales in units Selling price per unit Total budgeted sales Cash sales 2696 Sales on credit ------------------Collected in -------------- January February March $ 130,000 $ 300,000 March 31 Receivable Total 520,000 Accounts Receivable - January 1 $ Credit sales from: January February March Total collection of receivables $ 130,000 $ 300,000 $ 0 $ Total cash receipts from customers January February March Collections of receivables Calculation of payments for merchandise: January February March Desired ending inventory (units) Budgeted sales in units Total units required Beginning inventory (units) Number of units to be purchased Cost per unit Total cost of purchases ............Paid in---............ January February March $ 90,000 $ 280,000 March 31 Payable Total 370,000 $ Accounts Payable - January 1 Merchandise purchases in: January February March Total cash paid for merchandise $ 90,000 $ 280,000 $ Durado direct la S R e stes et les essat va fer category ayonunda and printe decimal Overhead Cost Category Activity Cost Pool) Driver Founded de Squared $6,100 $11,000 Total $10,000 barco Depreciation or 320 hours 7 hours 1,000 Setup number) required 1. Agter te verhoud coat pool to what the product an ABC December 31, 2017 $ 661,080 DIMSDALE SPORTS COMPANY Estimated Balance Sheet December 31, 2017 Assets Cash $ 36, eee Accounts receivable 52e, eee Inventory 105,000 Total current assets Equipment 540, eee Less: accumulated depreciation 67,58e Equipment, net Total assets Liabilities and Equity Accounts payable $ 37e.ee Bank loan payable 14.999 Taxes payable (due 3/15/2018) 90, eee Total liabilities Common stock 472. See Retained earnings 187,080 Total stockholders' equity Total liabilities and equity 472,500 $ 1,133,580 $ 474, 659,5ee $1,133,500 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 $20 per unit and resold for $52 per unit. The expected inventory level of 5,250 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. 6.500 units: February. 8.750 units; March 10.750 units, and April. 9.500 units. b. Cash sales and credit sales represent 25% and 75%, respectively, of total sales. Of the credit sales, 63% is collected in the first month after the month of sale and 37% in the second month after the month of sale. For the December 31, 2017, accounts receivable balance. $130.000 is collected in January and the remaining $390,000 is collected in February 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, 2017, accounts payable balance. $90.000 is paid in January and the remaining $280,000 is paid in February. d. Sales commissions equal to 20% of sales are paid each month. Sales salaries (excluding commissions) are $90.000 per year. e. General and administrative salaries are $156,000 per year. Maintenance expense equals $2.100 per month and is paid in cash. 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, $33,600; February, $93.600; and March, $26.400. 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. g. The company plans to buy land at the end of March at a cost of $175.000 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 $22.560 at the end of each month. 1. The income tax rate for the company is 37%. 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 2018: include the following component budgets: 1. Monthly sales budgets. 2. Monthly merchandise purchases budgets. 3. Monthly selling expense budgets. 4. Monthly general and administrative expense budgets. 5. Monthly capital expenditures budgets. 6. Monthly cash budgets, 7. Budgeted income statement for the entire first quarter (not for each month). 8. Budgeted balance sheet as of March 31, 2018. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Calc Required 6 Cash Bud Required 7 Required 8 Calculate the budgeted cash receipts and cash payments. (Negative values should be indicated with minus sign. Round your final answers to the nearest whole dollar.) Calculation of Cash receipts from customers: January February March Sales in units Selling price per unit Total budgeted sales Cash sales 2696 Sales on credit ------------------Collected in -------------- January February March $ 130,000 $ 300,000 March 31 Receivable Total 520,000 Accounts Receivable - January 1 $ Credit sales from: January February March Total collection of receivables $ 130,000 $ 300,000 $ 0 $ Total cash receipts from customers January February March Collections of receivables Calculation of payments for merchandise: January February March Desired ending inventory (units) Budgeted sales in units Total units required Beginning inventory (units) Number of units to be purchased Cost per unit Total cost of purchases ............Paid in---............ January February March $ 90,000 $ 280,000 March 31 Payable Total 370,000 $ Accounts Payable - January 1 Merchandise purchases in: January February March Total cash paid for merchandise $ 90,000 $ 280,000 $ Durado direct la S R e stes et les essat va fer category ayonunda and printe decimal Overhead Cost Category Activity Cost Pool) Driver Founded de Squared $6,100 $11,000 Total $10,000 barco Depreciation or 320 hours 7 hours 1,000 Setup number) required 1. Agter te verhoud coat pool to what the product an ABC