in need of assistance with required 6 cash budget and required 7

Near the end of 2019, the management of Dimsdale Sports Co., a merchandising company, prepared the following estimated balance sheet for December 31, 2019. $ 714,000 DIMSDALE SPORTS COMPANY Estimated Balance Sheet December 31, 2019 Assets Cash $ 36,500 Accounts receivable 520,000 Inventory 157,500 Total current assets Equipment 564,000 Less: Accumulated depreciation 70,500 Equipment, net Total assets Liabilities and Equity Accounts payable $ 345,000 Bank loan payable 13,000 Taxes payable (due 3/15/2020) 92,000 Total liabilities Common stock 473,000 Retained earnings 284,500 Total stockholders' equity Total liabilities and equity 493,500 $ 1,207,500 $ 450,000 757,500 $ 1,207,500 To prepare a master budget for January, February, and March of 2020, management gathers the following information. O CE Required 1 mos Required 2 Required 3 Required 4 Required 5 Required 6 Calc Required 6 Cash Bud Required 7 Required 8 Monthly merchandiske purchases budgets. DIMSDALE SPORTS CO. Merchandise Purchases Budget January, February, and March 2020 January February 9,500 11 000 March Total 9,500 20% 20% 20% 1,900 2.200 9.500 6,750 8,650 11,700 Next month's budgeted sales (units) Ratio of inventory to future sales Budgeted ending inventory (units) Budgeted units sales for month Required units of available merchandise Beginning inventory (units) Units to be purchased Budgeted cost per unit Budgeted merchandise purchases 1,900 11.000 12,900 2,200 10.700 5,250 3,400 1,900 9,800 23.900 30 30 $ $ $ 30 30 $ og 294 000 717,000 102,000 $ 321,000 $ $ Dane mase Budget To January, February, and varan 2020, management gathers the following information. . ok a. The company's single product is purchased for $30 per unit and resold for $57 per unit . The expected inventory level of 5,250 units on December 31, 2019. is more than management's desired level, which is 20% of the next month's expected sales (in units). Expected sales are January, 6,750 units; February, 9,500 units; March 11,000 units; and April, 9,500 units. b. Cash sales and credit sales represent 20% and 80%, respectively, of total sales. Of the credit sales, 57% is collected in the first month after the month of sale and 43% in the second month after the month of sale. For the December 31, 2019, accounts receivable balance, $125,000 is collected in January 2020 and the remaining $395.000 is collected in February 2020. c. Merchandise purchases are paid for as follows: 20% in the first month after the month of purchase and 80% in the second month after the month of purchase. For the December 31, 2019, accounts payable balance, $60.000 is paid in January 2020 and the remaining $285,000 is paid in February 2020. d. Sales commissions equal to 20% of sales are paid each month. Sales salaries (excluding commissions) are $60.000 per year. e. General and administrative salaries are $132,000 per year. Maintenance expense equals $2.200 per month and is paid in cash. f. Equipment reported in the December 31, 2019. balance sheet was purchased in January 2019. It is being depreciated over eight years under the straight-line method with no salvage value. The following amounts for new equipment purchases are planned in the coming quarter: January, $38,400: February, $96.000; and March, $26,400. This equipment will be depreciated under the straight- line method over eight years with no salvage value. A full month's depreciation is taken for the month in which equipment is purchased. g. The company plans to buy land at the end of March at a cost of $165,000, which will be paid with cash on the last day of the month. h. he company has a working arrangement with its bank to obtain additional loans as needed. The interest rate is 12% per year, and nterest is paid at each month-end based on the beginning balance. Partial or full payments on these loans can be made on the last day of the month. The company has agreed to maintain a minimum ending cash balance of $27,000 at the end of each month. 1. The income tax rate for the company is 43%. Income taxes on the first quarter's income will not be paid until April 15. CES Required: Prepare a master budget for each of the first three months of 2020; include the following component budgets. 1. Monthly sales budgets. 2. Monthly merchandise purchases budgets. 3. Monthly selling expense budgets. 4. Monthly general and administrative expense budgets. 5. Monthly capital expenditures budgets. 6. Monthly cash budgets. 7. Budgeted income statement for the entire first quarter (not for each month). 8. Budgeted balance sheet as of March 31, 2020. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Calc Required 6 Cash Bud Required 7 Required 8 Monthly sales budgets. DIMSDALE SPORTS CO. Sales Budget For January, February, and March 2020 Budgeted Unit Budgeted Budgeted Total Sales Unit Price Dollars January 6.750 $ 57 384.750 February 9.500 57 541.500 March 11.000 57 627,000 Totals for the quarter 27.250 1,553.250 DET Required 2 > Required 1 Required 2 Requred 3 DULEDELSE Required 4 Required 5 Required 6 Calc Required 6 Cash Bud Required 7 Required 8 Monthly selling expense budgets. S DIMSDALE SPORTS COMPANY March Total Budgeted sales Sales commission percent Sales commissions Selling Expense Budget January, February, and March 2020 January February $ 384,750 $ 541,500 $ 20% 20% 76,950 108,300 5,000 5,000 $ 81,950 113,300 $ 627,000 20% 125.400 Sales salaries 310.650 15,000 325,650 5.000 130.400 Total budgeted selling expenses Calculate the budgeted cash receipts and cash payments. (Negative values should be indicated with minus sign. Round your final answers to the nearest whole dollar.) Calculation of Cash receipts from customers: January February March Sales in units 6.750 9.500 11.000 $ 57 00 $ 57.00 Selling price per unit Total budgeted sales 57.00 TAGA $ 384,750 $ 541.500 627.000 Cash sales 20% 76.950 Sales on credit 108,300 433,200 125.400 501.600 80% $ 307,800 $ $ Collected in March 31 Total January February March Receivable Accounts Receivable - January 1 $ 520,000 $ 125.000 $ 395,000 Credit sales from: 307 800 $ 175,446 $ 132.354 $ 0 January February March 433,200 $ 246,924 186.276 501,600 501.600 Total collection of receivables $ 125,000 $ 570.446 379 278 $ 687,876 March Current month's cash sales Total cash receipts from customers January February $ 76.950 $ 108,300 125,000 570.446 $ 201.950 $ 678,746 $ 125.400 Collections of receivables 379 278 Total cash receipts $ 504,678 Calculation of payments for merchandise: January March February 2.200 S 1.900 $ $ 1.900 $ 6.750 $ 9.500 $ 11,000 8.650 11,700 12,900 Desired ending inventory (units) Budgeted sales in units Total units required Beginning inventory (units) Number of units to be purchased Cost per unit Total cost of purchases 5.250 1,900 2.200 3.400 9.800 10.700 30 $ 30 $ $ 30 294,000 $ 102.000 $ $ 321,000 Paid in March 31 Total January February March Payable $ 345.000 $ 60.000 $ 285,000 Accounts Payable - January 1 Merchandise purchases in: January February 102.000 20,400 $ 81,600 $ 0 294.000 58.800 235 200 March 321,000 321,000 $ 60,000 $ 305.400 $ 140.400 $ 556.200 Total cash paid for merchandise DIMSDALE SPORTS CO. Cash Budget January, February, and March 2020 January February March Beginning cash balance $ 36,500 $ 31,700 $ 182,616 Cash receipts from customers 201,950 678,746 504,678 Total cash available 238.450 710 446 687,294 Cash payments for Merchandise (60,000) (305 400) (140 400) Purchase of land (165,000) General & administrative salaries 11.000 11,000 11,000 Maintenance expense 2 200 2.200 2,200 Sales commissions 76.950 108,300 125,400 Sales salaries 5.000 5.000 5.000 Interest on bank loan (130) Taxes payable (92,000) 35.020 (178.900) (253,800) 119,894 182.616 Total cash payments Preliminary cash balance Additional loan (loan repayment) Ending cash balance 44,700 (13000) 31,700 $ $ 182,616 $ 119,894 Loan balance February March January $ 13,000 $ 0 $ 0 Loan balance - Beginning of month Additional loan (loan repayment) (13.000) 0 $ $ 0 0 $ Loan balance - End of month dollar) DIMSDALE SPORTS CO. Budgeted Income Statement For Three Months Ended March 31, 2020 Sales $ 1,553,250 Cost of goods sold Gross profit Operating expenses Sales commissions expense $ 310,650 Sales salaries expense General administrative salaries 33,000 Maintenance expense 6,000 Depreciation expense Interest expense Total operating expenses 349,650 (349,650) Income before taxes Income taxes payable $ (349.650) Net income