Dimsdale Sports, a merchandising company, reports the following balance sheet at December 31. DIMSDALE SPORTS COMPANY Balance Sheet Cash Assets Accounts receivable December 31 Inventory Equipment Less: Accumulated depreciation Total assets Liabilities Liabilities and Equity Accounts payable Loan payable Taxes payable (due March 15) Equity Common stock Retained earnings $ 540,000 67,500 $ 360,000 15,000 90,000 $ 472,500 246,000 $ 36,000 525,000 150,000 472,500 $1,183,500 $ 465,000 718,500 Total liabilities and equity $ 1,183,500 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 $55 per unit. The inu December 31 is more than management's desired level, which is 20% of the next month's budg- January, 7,000 units; February, 9,000 units; March, 11,000 units; and April, 10,000 units. All sales h Cash receinte from cales are hudneter as follows lanuary $221 250 February $697000 Mar Saved Help Save & Exit Sub Check my wo 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 $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. b. Cash receipts from sales are budgeted as follows: January, $221,250, February, $697,000; March, $489,500. c. Cash payments for merchandise purchases are budgeted as follows: January, $80,000, February, $302,800, March, $147,600. 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 $2,000 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. 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 $25,000 at the end of each month. i. The income tax rate for the company is 40%. 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. Search < Prev 2 of 3 Next > L paid at each month-end based on the beginning-month balance. Partial or full payments on these loans are ma 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 first quarter's income will not be paid until A 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 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 Merchandise purchases budgets. DIMENALE COODTE < Prev 2 of 3 Next > 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 Sales budgets. DIMSDALE SPORTS Sales Budget January February March Totals Budgeted sales units 7,000 9,000 11,000 27.000 Selling price per unit $ 55 $ 55 $ 55 $ 55 Total budgeted sales $ 385,000 $ 495,000 $ 605,000 $ 1,485,000 Required 1 Required 2 > Required 1 Required 2 Required 3. Required 4 Required 5 Required 6 Required 7 Req Merchandise purchases budgets. DIMSDALE SPORTS Merchandise Purchases Budget January February March Budgeted sales units Add: Desired ending inventory 7,000 9,000 11,000 Next period budgeted sales units 9,000 11,000 10,000 Ratio of inventory to future sales 20% 20% 20% Desired ending inventory units 1,800 2,200 2,000 Total requird units 8,800 11,200 13,000 Less: Beginning inventory units 5,000 Units to be purchased 3,800 Cost per unit $ 30 $ 30 $ 30 30 $ Cost of merchandise purchases Required 1 < Prev 2 of 3 Required 3 > Next > 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 20% 5,000 < Prev 2 of 3 Next > Complete this question by entering your answers in the tabs below. Required 1 Required 3 Required 2 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 Total general and administrative expenses < Prev 2 of 3 Next > Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Capital expenditures budgets. DIMSDALE SPORTS Capital Expenditures Blidget January February March Total Equipment purchases 36,000 $ 96,000 $ 28,800 $ 160,800 Land purchase 150,000 150,000 Total capital expenditures $ 36,000 $ 96,000 $ 178,800 310,800 < Required 4 Required 6 > < Prev 2 of 3 Next > Cash budgets. ( SDALE SPORTS COMED Cash Budget Beginning cash balance Add: Cash receipts from sales Total cash available Less Cash payments for: Purchase of land General and administrative salaries Purchases of equipment Maintenance Sales commissions Loan interest Januny February March Q Search < Prev 2 of 3 0 Next > Loan interest Total cash payments Preliminary cash balance Ending cash balance Loan balance - Beginning of month 0 0 0 Loan balance January February March Additional loan (loan repayment) Loan balance - End of month < Required 5 Required 7 > Budgeted income statement for entire quarter (not monthly) ended March 31 Budgeted Income Statemerit For Three Months Ended March 31 Selling, general and administrative expenses < Prev 2 of 3 Budgeted balance sheet as of March 31. Budgeted Balance Sheet March 31 Assets Total assets Liabilities and Equity Liabilities < Prey 2 of 3 0 Budgeted balance sheet as of March 31. Budgeted Balance Sheet March 31 Assets Total assets Liabilities and Equity Liabilities < Prey 2 of 3 0 Budgeted income statement for entire quarter (not monthly) ended March 31 Budgeted Income Statemerit For Three Months Ended March 31 Selling, general and administrative expenses < Prev 2 of 3