Near the end of 2017, the management of Ballixter Boxing Co., a merchandising company, prepared the following estimated balance sheet for December 31, 2017. BALLIXTER BOXING COMPANY Estimated Balance Sheet December 31, 2017 Assets Liabilities and Equity Cash $36,500 Accounts payable $355,000 Accounts receivable 520,000 Bank loan payable 14,000 Inventory 142,500 Taxes payable (due3/15/2018) 88,000 Total current assets 699,000 Total liabilities $457,000 Equipment $537,000 Common stock 472,500 Less accumulated depreciation 67,125 469,875 Retained earnings 239,375 Total stockholders' equity 711,875 Total assets $1,168,875 Total liabilities and equity $1,168,875 To prepare a master budget for January, February, and March of 2018, management gathers the following information. a. Ballixter Boxings single product is purchased for $30 per unit and resold for $55 per unit. The expected inventory level of 4,750 units on December 31, 2017, is more than managements desired level for 2018, which is 20% of the next months expected sales (in units). Expected sales are: January, 7,000 units; February, 8,750 units; March, 11,500 units; and April, 10,000 units. b. Cash sales and credit sales represent 25% and 75%, respectively, of total sales. Of the credit sales, 68% is collected in the first month after the month of sale and 32% in the second month after the month of sale. For the December 31, 2017, 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, 2017, accounts payable balance, $85,000 is paid in January and the remaining $270,000 is paid in February. d. Sales commissions equal to 20% of sales are paid each month. Sales salaries (excluding commissions) are $84,000 per year. e. General and administrative salaries are $144,000 per year. Maintenance expense equals $1,800 per month and is paid in cash. 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 planned in the coming quarter: January, $34,000; February, $98,000; and March, $30,000. This equipment will be depreciated under the straight-line method over eight years with no salvage value. A full months 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 $145,000, which will be paid with cash on the last day of the month. h. Ballixter Boxing 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 $31,810 in each month. i. The income tax rate for the company is 32%. Income taxes on the first quarters income will not be paid until April 15. Requirements: Prepare a master budget for each of the first three months of 2018; include the following component budgets (show supporting calculations as needed directly behind that budget, and round amounts to the nearest dollar):

1.Monthly merchandise purchases budgets.

I am almost done with the merchandise purchases budgets but am stuck on Deduct: beginning inventory. please help