Dimsdale Sports, a merchandising company, reports the following balance sheet at December 31. DIMSDALE SPORTS COMPANY Balance Sheet Assets December 31 Cash Accounts receivable Inventory Equipment Less: Accumulated depreciation Total assets Liabilities and Equity Liabilities Accounts payable Loan payable Taxes payable (due March 15) Equity Common stock Retained earnings Total liabilities and equity $ 20,500 520,000 $ 636,000 79,500 95,000 556,500 $ 1,192,000 $ 350,000 13,000 90,000 $470,000 269,000 453,000 739,000 $ 1,192,000 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 $59 per unit. The inventory level of 4,750 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, 9,500 units; March, 11,500 units; and April, 9,500 units. All sales are on credit. b. Cash receipts from sales are budgeted as follows: January, $249,475; February, $722,627; March, $549,335. c. Cash payments for merchandise purchases are budgeted as follows: January, $60,000: February, $305,600; March, $102,000. d. Sales commissions equal to 20% of sales dollars are paid each month. Sales salaries (excluding commissions) are $7,000 per month. e. General and administrative salaries are $12,000 per month. Maintenance expense equals $1,900 per month and is paid in cash. e. General and administrative salaries are $12,000 per month. Maintenance expense equals $1,900 per month and is paid in cash. f. New equipment purchases are budgeted as follows: January, $40,800; February, $91,200; and March, $28,800. Budgeted depreciation expense is January, $ 7,050; February, $8,000; and March, $8,300. g. 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 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. i. The income tax rate for the company is 41%. 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 budget. 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 61 Required 7 Required 8. Sales budgets. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 Sales budgets. DIMSDALE SPOTS Sales Budget January Budgeted sales units Selling price per unit Total budgeted sales February March Totals Required 1 Required 2 Required 31 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 required units Units to be purchased Cost per unit Cost of merchandise purchases DIMSDALE SPORTS Merchandise Purchases Budget January February March Required 1 Required 2 Required 3 Required 4 Required 5 Required 6. Required 7 Required 8 Selling expense budgets. Budgeted sales Sales commissions DIMSDALE SPORTS Selling Expense Budget January February March Required 1 Required 2 Required 3 Required 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 February January Total general and administrative expenses March Total Required 1 Required 2 Required 31 Required 41 Required 5 Required 6 Required 7 Required 81 Capital expenditures budgets. DIMSDALE SPORTS Capital Expenditures Budget January February March Total capital expenditures Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 Cash budgets. Note: 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 DIMSDALE SPORTS COMPANY Cash Budget January February March 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 + Loan balance January February March 2 Required E Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 Budgeted income statement for the entire first quarter (not for each month). Note: Round your final answers to the nearest whole dollar. DIMSDALE SPORTS COMPANY Budgeted Income Statement For Three Months Ended March 31 Selling, general and administrative expenses Total operating expenses Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 Budgeted balance sheet as of March 31. Note: Round your final answers to the nearest whole dollar. DIMSDALE SPORTS COMPANY Budgeted Balance Sheet March 31 Assets Total assets Liabilities Equity Total Liabilities and Equity Liabilities and Equity