Dimsdale Sports, a merchandising company, reports the following balance sheet at December $31.$DIMSDALE SPORTS COMPANYBalance SheetDecember $31$Assets Cash $ $21,500$Accounts receivable $520,000$Inventory $95,000$Equipment$ $564,000$ Less: Accumulated depreciation$70,500493,500$Total assets $ $1,130,000$Liabilities and Equity Liabilities Accounts payable$ $375,000$ Loan payable$13,000$ Taxes payable $($due March $15)92,000480,000$ Equity Common stock$ $470,500$ Retained earnings $179,500650,000$ Total liabilities and equity $ $1,130,000$To prepare a master budget for January, February, and March, use the following information.The company$$s single product is purchased for $$20$ 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$$s budgeted sales units. Budgeted sales are January, $7,000$ units; February, $8,750$ units; March, $10,750$ units; and April, $9,000$ units. All sales are on credit.Cash receipts from sales are budgeted as follows: January, $$242,600$; February, $$720,360$; March, $$499,590.$Cash payments for merchandise purchases are budgeted as follows: January, $$70,000$; February, $$321,000$; March, $$100,600.$Sales commissions equal to $20\%$ of sales dollars are paid each month. Sales salaries $($excluding commissions$)$ are $$6,500$ per month.General and administrative salaries are $$11,000$ per month. Maintenance expense equals $$1,800$ per month and is paid in cash.New equipment purchases are budgeted as follows: January, $$38,400$; February, $$93,600$; and March, $$24,000.$ Budgeted depreciation expense is January, $ $6,275$; February, $$7,250$; and March, $$7,500.$The company budgets a land purchase at the end of March at a cost of $$150,000,$ which will be paid with cash on the last day of the month.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 $$21,500$ at the end of each month.The income tax rate for the company is $35\%.$ Income taxes on the first quarter$$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:Sales budget.Merchandise purchases budgets.Selling expense budgets.General and administrative expense budgets. Hint: Depreciation is included in the general and administrative budget for merchandisers.Capital expenditures budgets.Cash budgets.Budgeted income statement for entire quarter $($not monthly$)$ ended March $31.$Budgeted balance sheet as of March $31.$