Dimsdale Sports, a merchandising company, reports the following balance sheet at December 31. Cash Assets Accounts receivable Inventory DIMSDALE SPORTS COMPANY Balance Sheet December 31 Equipment Less: Accumulated depreciation Total assets Liabilities Liabilities and Equity Accounts payable Loan payable $ 21,500 $ 636,000 79,500 520,000 142,500 556,500 $ 1,240,500 Taxes payable (due March 15) Equity Common stock Retained earnings Total liabilities and equity $ 355,000 13,000 90,000 $ 470,500 312,000 458,000 782,500 $ 1,240,500 To prepare a master budget for January, February, and March, use the following information. a. The company's single product is purchased for $30 per unit and resold for $56 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, 7,250 units; February, 9,250 units; March, 11,000 units; and April, 9,500 units. All sales are on credit. b. Cash receipts from sales are budgeted as follows: January, $267,100; February, $737,279; March, $523,908. c. Cash payments for merchandise purchases are budgeted as follows: January, $60,000; February, $321,100; March, $162,000. d. Sales commissions equal to 20% of sales dollars are paid each month. Sales salaries (excluding commissions) are $8,000 per month. e. General and administrative salaries are $11,000 per month. Maintenance expense equals $2,100 per month and is paid in cash. f. New equipment purchases are budgeted as follows: January, $33,600; February, $100,800; and March, $24,000. Budgeted depreciation expense is January, $ 6,975; February, $8,025; and March, $8,275. g. The company budgets a land purchase at the end of March at a cost of $145,000, 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 $21,500 at the end of each month. i. 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. 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. Budgeted sales units Selling price per unit Total budgeted sales DIMSDALE SPORTS Sales Budget January February March Totals 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 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 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 February January Total general and administrative expenses March Total Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 Capital expenditures budgets. Total capital expenditures DIMSDALE SPORTS Capital Expenditures Budget January February March 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 Loan balance - Beginning of month Additional loan (loan repayment) Loan balance-End of month Loan balance January February March 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). (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. (Round your final answers to the nearest whole dollar.) Total assets Liabilities Equity DIMSDALE SPORTS COMPANY Total Liabilities and Equity Budgeted Balance Sheet March 31 Assets Liabilities and Equity