Dimsdale Sports, a merchandising company, reports the following balance sheet at December 31. DIMSDALE SPORTS COMPANY Balance Sheet Cash Assets Accounts receivable December 31 $ 20,500 520,000 110,000 Inventory Equipment Total assets Less: Accumulated depreciation Liabilities and Equity $540,000 67,500 472,500 $ 1,123,000 Liabilities Accounts payable $380,000 Loan payable Taxes payable (due March 15) 12,000 89,000 481,000 Equity Common stock $474,000 Retained earnings 168,000 Total liabilities and equity 642,000 $ 1,123,000 To prepare a master budget for January, February, and March, use the following information. a. The company's single product is purchased for $20 per unit and resold for $58 per unit. The inventory level of 5,500 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, 6,750 units; February, 8,750 units; March, 10,500 units; and April, 10,500 units. All sales are on credit. b. Cash receipts from sales are budgeted as follows: January, $262,025; February, $727,855; March, $513,619. c. Cash payments for merchandise purchases are budgeted as follows: January, $65,000; February, $327,000; March, $84,400. d. Sales commissions equal to 20% of sales dollars are paid each month. Sales salaries (excluding commissions) are $5,000 per month. e. General and administrative salaries are $12,000 per month. Maintenance expense equals $2,200 per month and is paid in cash. f. New equipment purchases are budgeted as follows: January, $38,400; February, $93,600; and March, $24,000. Budgeted depreciation expense is January, $ 6,025; February, $7,000; and March, $7.250. g. The company budgets a land purchase at the end of March at a cost of $180,000, 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 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 $20,500 at the end of each month. 1. 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 the months of January, February, and March that has the following budgets: 1. Sales budgets. 2. Merchandise purchases budgets. 3. Selling expense 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. 07 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. Round your final answers to the nearest whole dollar.) Beginning cash balance Total cash available Less: Cash payments for Total cash payments Preliminary cash balance Ending cash balance DIMSDALE SPORTS COMPANY Cash Budget January February +March 1 0 Can youre v Ivan repayment van pily are VE MILOLOU usagi uru your final answers to the nearest whole dollar.) DIMSDALE SPORTS COMPANY Beginning cash balance 53 nces Total cash available Less: Cash payments for Total cash payments Preliminary cash balance Ending cash balance Loan balance-Beginning of month Additional loan (loan repayment) Loan balance-End of month Cash Budget January February March 0 Loan balance January February March