Mear the end of 2017, the management of Dimsdale Sports Co.,

Near the end of 2017, the management of Dimsdale Sports Co., a merchandising company, prepared the following estimated balance sheet for December 31, 2017 DIMSDALE SPORTS COMPANY Estimated Balance Sheet Decenber 31, 2017 Assets s 36, 500 520,000 100,000 Cash Accounts receivable Inventory Total current assets Equipment Less: accumulated depreciatiorn 656,500 564,000 70,500 Equipment, net Total ansets 493,500 $1,150,000 Liabilities and Equity Accounts payable Bank loan payable Taxes payable (due 3/15/2018) Total liabilities $360,000 15,000 89,000 $464,000 Common stock Retained earnings Total stockholders equity Total liabilities and equity 472,500 213,500 686,000 1,150, 000 To prepare a master budget for January, February, and March of 2018, management gathers the following information gle product is purchased for $20 per unit and resold for $55 per unit. The expected inventory level of nits). Expected sales are: January, 7.250 units; February, 9,000 units; March, 11,000 units; and April, 9,000 units com 5,000 units on December 31, 2017, is more than management's desired level, which is 20% of the next month's expected vely, of total sales. Of the credit sales, 63% is collected in the month of sale and 37% in the second month after the month ofsale For the December 31, 2017 00 is collected in Februany Cash sales and credit sales represent 25% and 75%, respecti accounts receivable balance, $130,000 is collected in January and the remaining $390,0 Merchandise purchases are paid for as follo month afte the remaining $270,000 is paid in February Sales commissions equal to 20% of sales are paid each month month after the month of purchase and 80% in the second r the month of purchase. For the December 31, 2017, accounts payable balance, $90,000 is paid in January and in the first . Sales salaries excluding commissions are $90,000 per .General and administrative salaries are $144,000 per year. Maintenance expense equals $2,100 per month and is paid in cas f. Equipment reported in the December 31, 2017, balance sheet was purchased in January 2017. It is being depreciated over eight years under the straight-line method with no salvage value. The following amounts for new equipment purchases are anned in the coming quarter: January, $38,400; February, $93,600; and March, $24,000. 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. The the month. The company has a working arrangement with its bank to obtain additional loans as needed. The interest rate is 12% per year, and interest 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 $21,288 at the end of each month pany plans to buy land at the end of March at a cost of $150,000, which will be paid with cash on the last day of l. The income tax rate for the conn nanv is 37% income taxes on the first nuarter's income will not he naid until Anril 15 15. i. The income tax rate for the company is 37%. Income taxes on the first quarter's income will not be paid until April Required: Prepare a master budget for each of the first three months of 2018; 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, 2018. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Requ 6 Required 6 Calc Cash Bud Required 7 Required 8 Monthly sales budgets DIMSDALE SPORTS co Sales Budget reh 2018 Required 6 Calc Required 6 Cash Bud Required 7 Required 1 Required 2 Required 3 Required 4 Required 5 Monthly sales budgets. DIMSDALE SPORTS co. Sales Budget For January, February, and March 2018 Budgeted Unit Sales Budgeted Unit Price Budgeted Total Dollars January February March Totals for the quarter Required 2 Cash BudRequired 7 Required 8 Required 1 Required 2 Calc Required 3 Required 4 Required eauired 6 Required 6 Monthly merchandise purchases budgets. DIMSDALE SPORTS co. Merchandise Purchases Budget January, February, and March 2018 January February March Next month's budgeted sales (units) Ratio of inventory to future sales 9,000 20% 11,000 20% 9,000 20% Required units of available merchandise Units to be purchased Required 1 Required 3> Required 6 Required 6 Required 1Required 2 Required 3 Required 4 Required 5 Calc Cash Bud Required 7 Required 8 Monthly selling expense budgets. DIMSDALE SPORTS COMPANY Selling Expense Budget January, February, and March 2018 January February March Budgeted sales Sales commissions Required 6 Required 6 Required 1 Required 2 Required 3 | Required 4 Required ash Bud Required 7 Requine Monthly general and administrative expense budgets. JanuaryFebruary $ 564,000 March Equipment-beginning of month Equipment purchases Equipment - end of month DIMSDALE SPORTS CO General and Administrative Expense Budget January, February, and March 2018 Monthly capital expenditures budgets. DIMSDALE SPORTS COMPANY Capital Expenditures Budget January, February, and March 2018 January February March Total