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 December 31, 2017 Assets Cash Accounts receivable Inventory Total current assets Equipment Less accumulated depreciation $36, 500 520,000 95,00 $651, 500 528,000 66.000 Equipment, net Total assets 462,000 1,113,500 Liabilities and Equity Accounts payable Bank loan payable Taxes payable (due 3/15/2018) Total liabilities Common stock Retained earnings Total stockholders equity Total liabilities and equity 345,000 14,000 90,000 $449,800 472,500 192,000 664,500 $1,113,500 To prepare a master budget for January, February, and March of 2018, management gathers the following information. a. The company's single product is purchased for $20 per unit and resold for $58 per unit. The expected inventory level of 4,750 units on December 31, 2017, is more than management's desired level, which is 20% of the next month's expected sales (in units) Expected sales are: January, 7,000 units; February, 9,000 units; March, 10,500 units; and April, 9,000 units. b. Cash sales and credit sales represent 20% and 80%, 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, 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, $70,000 is paid in January and the remaining $275,00O is paid in February d. Sales commissions equal to 20% of sales are paid each month. Sales salaries (excluding commissions) are $72,000 per year e. General and administrative salaries are $132,000 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, $31,200; Februery, $93,600; and March, $21,600. 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 Ianc et the end of March at cost of $160,000, which will be paid with cash on the last day of the month h. 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 dley of the month. The company has agreed to maintain a minimum endling cash balance of $27,000 at the end of each month i. The income tax rate for the company is 41%. Income taxes on the first quarter's income will not be paid until April 15 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 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 6 Calc Required 6 Cash Bud Required 1Required 2 Required 3 Required 4 Required 5 Required 7 Required 8 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 > Required 1 Complete this question by entering your answers in the tabs below. Required 6 Required 6 Required 1 Required 2 eqid 3 Required 4Required 5 Required 7 Required 8 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 10,500 9,000 20% 20% 20% Required units of available merchandise Units to be purchased Required 1 Required 3> Required 6 Calc Required 6 Cash Bud Required 1 Required 2 Required 3 Required 4 Required 5 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 4 > Required 2 Complete this question by entering your answers in the tabs below Required 6 Required 6 Required 7 Required 8 Cash Bud Required 1 Required 2 Required 3 Required 4 Required 5 Monthly selling expense budgets DIMSDALE SPORTS COMPANY Selling Expense Budget January, February, and March 2018 January February March Budgeted sales Sales commissions Required 4> Required 2 Required 1 d2 Required 3 Required 4 Required 5CCash Bud Required 7 Required Calc Monthly general and administrative expense budgets. January February March $ 528,000 Equipment beginning of month Equipment purchases Equipment - end of month DIMSDALE SPORTS CO General and Administrative Expense Budget January, February, and March 2018 January February K Required 3 Required 5 > Complete this question by entering your answers in the tabs below Required 6 Calc Required 6 Cash Bud Required 7 Required 8 Required 1 Required 2 Required 4 Required 5 Required 3 Monthly capital expenditures budgets. DIMSDALE SPORTS COMPANY Capital Expenditures Budget January, February, and March 2018 March February January Total Required 4 Required 6 Calc> Complete this question by entering your answers in the tabs Dbelow Required 6 Required 6 Cash Bud Required 1 Required 2 Required 3 Required 4 Required 5 Required 7 Required 8 Calc 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 February January March Sales in units Selling price per unit Total budgeted sales Cash sales Sales on credit 20% Collected in March 31 March TotalJanuary Receivable Accounts Receivable January 1520,000130,000$ 390,000 Credit sales from January February March $130,000 Total collection of receivables Total cash receipts from customers February January March Collections of receivables Calculation of payments for merchandise February March January Desired ending inventory (units) Budgeted sales in units Total units required Beginning inventory (units) Number of units to be purchased Calculation of payments for merchandise January March February 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 aid in March 31 Total Payable January February March $ 345,000$ 70,000 275,000 Accounts Payable - January 1 Merchandise purchases in January February March 70,000 Total cash paid for merchandise Required 5 Required 6 Cash Bud Complete this question by entering your answers in the tabs below Required 6 Calc Required 6 Cash Bud Required 1 Required 2 Required 3 Required 4 Required 5 Required 7 Required 8 Monthly cash budgets. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to the nearest whole dollar.) DIMSDALE SPORTS CO Cash Budget January, February, and March 2018 February March January Beginning cash balance Total cash available sh payments for Total cash payments Preliminary cash balance Ending cash balance Loan balance February March January Loan balance Beginning of month Additional loan (loan repayment) Loan balance - End of month