Near the end of 2011, the management of Simid Sports Co., a merchandising company, prepared the following estimated statement of financial position for December 31, 2011. SIMID SPORTS COMPANY Estimated Statement of Financial position December 31, 2011 Assets Cash 36,000 Accounts receivable 520,000 Inventory 100,000 Total current assets 656,000 $543,000 Equipment Less accumulated depreciation 67,875 475,125 $ 1,131,125 Total assets Liabilities and Equity Accounts payable Bank loan payable Tax payable (due 3/15/2012) $340,000 16,000 91,000 $ 447,000 Total liabilities Share capital-ordinary Retained earnings 474,500 209,625 Total stockholders' equity 684,125 $ 1,131,125 Total liabilities and equity To prepare a master budget for January, February, and March of 2012, management gathers the following information, To prepare a master budget for January, February, and March of 2012, management gathers the following information. a. Simid Sports' single product is purchased for $20 per unit and resold for $56 per unit. The expected inventory level of 5,000 units on December 31, 2011, is more than management's desired level for 2012, which is 20% of the next month's expected sales (in units). Expected sales are: January, 6,750 units; February, 9,000 units; March, 10,500 units; and April, 9,000 units. b. Cash sales and credit sales represent 25% and 75%, respectively, of total sales. Of the credit sales, 59% is collected in the first month after the month of sale and 41% in the second month after the month of sale. For the December 31, 2011, accounts receivable balance, $130,000 is collected in January and the remaining $390,000 is collected in February. 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, 2011, accounts payable balance, $80,000 is paid in January and the remaining $260,000 is paid in February. d. Sales commissions equal to 20% of sales are paid each month. Sales salaries (excluding commissions) are $66,000 per year. e. General and administrative salaries are $144,000 per year. Maintenance expense equals $2,100 per month and is paid in cash. f. Equipment reported in the December 31, 2011, statement of financial position was purchased in January 2011. It is being depreciated over eight years under the straight-line method with no residual value. The following amounts for new equipment purchases are planned in the coming quarter: January, $35,000; February, $98,000; and March, $28,500. This equipment will be depreciated under the straight-line method over eight years with no residual value. A full month's depreciation is taken for the month in which equipment is purchased. g. The company plans to acquire land at the end of March at a cost of $160,000, which will be paid with cash on the last day of the month. h. Simid Sports 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 $34,140 in each month. I. The income tax rate for the company is 41%. Income tax on the first quarter's income will not be paid until April 15. 6. Monthly cash budgets. (Leave no cells blank - be certain to enter "0" wherever required. Input all amounts as positive values except negative preliminary cash balance and repayment of loan to bank which should be indicated by a minus sign. Round your intermediate calculations and final answers to the nearest dollar amount. Omit the "$" sign in your response.) SIMID SPORTS Co. Cash Budget January, February, and March 2012 January February March Beginning cash balance 36000 2$ | Cash receipts from customers Total cash available Cash disbursements Payments for merchandise Sales commissions Sales salaries General & administrative salaries Maintenance expense Interest Tax payable Purchases of equipment (Click to select) Total cash disbursements Preliminary cash balance Ending cash balance Ending cash balance Loan balance, end of month %24 %24 %24 %24 %24 %24 %24 7. Budgeted income statement for the entire first quarter (not for each month). (Round your ans the nearest dollar amount. Input all amounts as positive values. Omit the "$" sign in yor response.) SIMID SPORTS CO. Budgeted Income Statement For Three Months Ended March 31, 2012 Sales Cost of goods sold Gross profit Operating expenses Sales commissions Sales salaries General administrative salaries Maintenance expense Depreciation expense Interest expense Profit before tax Income tax Net profit %24 %24 %24 8. Budgeted statement of financial position as at March 31, 2012. (Be sure to list the assets in ore their liquidity. Round your answers to the nearest dollar amount. Leave no cells blank certain to enter "0" wherever required. Input all amounts as positive values. Round intermediate calculations and final answers to the nearest dollar amount. Omit the "$" si your response.) SIMID SPORTS Co. Budgeted Statement of Financial Position March 31, 2012 Assets Cash Accounts receivable Inventory Total Current Assets (Click to select) (Click to select) (Click to select) Total Assets Liabilities and Equity Accounts payable Bank loan payable Tax payable Total Liabilities Share capital-ordinary Retained earnings Total Stockholders' Equity Total Liabilities & Equity %24 %24 %24 %24 %24