Near the end of 2017, the management of Dimsdale Sports Co., a merchandising company, prepared the following estimated balance sheet for December 31, 2017.

To prepare a master budget for January, February, and March of 2018, management gathers the following information:

a) The companys 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, which is 20% of the next months expected sales (in units). Expected sales are: January, 7,500 units; February, 8,500 units; March, 11,000 units; and April, 10,000 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, 2017, accounts receivable balance, $125,000 is collected in January and the remaining $395,000 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, $80,000 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 $2,000 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, $33,600; February, $100,800; and March, $28,800. 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 buy 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) 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 $11,750 at the end of each month.

i) The income tax rate for the company is 43%. Income taxes on the first quarters 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. 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.

DIMSDALE SPORTS COMPANY Estimated Balance Sheet December 31, 2017 Asset:s $ 36,500 520,000 142,500 Cash Accounts receivable Inventory Total current assets Equipment Less: accumulated depreciation $ 699,000 612,000 76, 500 Equipment, net Total assets 535,500 $1,234,500 Liabilities and Equity $ 350,000 15,000 91,000 Accounts payable Bank loan payable Taxes payable (due 3/15/2018) Total liabilities Common stock Retained earnings Total stockholders' equity Total liabilities and equity $ 456, 000 470,500 308,000 778,500 1,234, 500 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 ts Required 8 Required 7 Monthly merchandise purchases budgets eBook Print ferences DIMSDALE SPORTS CO Merchandise Purchases Budget January, February, and March 2018 February March January 8,500 20% 11.000 Next month's budgeted sales (units) Ratio of inventory to future sales 10,000 20% 20% Required units of available merchandise Units to be purchased Required 1 Required 3 > Complete this question by entering your answers in the tabs below. Required 6 Calc Required 6 Required 7 Cash Bud Required 8 Required 1 Required 2 Required 3 Required 4 Required5 Monthly selling expense budgets DIMSDALE SPORTS COMPANY Selling Expense Budget January, February, and March 2018 es February January March Budgeted sales Sales commissions Required 4 Required 2 Complete this question by entering your answers in the tabs below Requi Required 1 Required 2 Required 3 Required 4 Required 5 Calc Cash BudRequired 7 Monthly general and administrative expense budgets February March January Equipment - beginning of month Equipment purchases Equipment- end of month S 612,000 es DIMSDALE SPORTS CO General and Administrative Expense Budget January, February, and March 2018 March February January Required 3 Required5 > Complete this question by entering your answers in the tabs below Required 6 Required 6 Required 1 Required 2 Required 3 Required 4 Required 5 Cal Cash Bud Required 7 Required 8 Monthly capital expenditures budgets DIMSDALE SPORTS COMPANY Capital Expenditures Budget January, February, and March 2018 February January March Total Required 4 Required 6 Calc Required 6 Required 6 Required 1 Required 2 Required 3 Required 4 Required 5 Required 8 Cash BudRequired 7 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 ok January February March nt Sales in units Selling price per unit Total budgeted sales Cash sales Sales on credit nces 20% 80% Collected in March 31 February Total January 520,000 125 March Receivable Accounts Receivable - January 000 395,000 Credit sales from January February March S 125,000$ 395,000 S Total collection of receivables Total cash receipts from customers January February March Collections of receivables Calculation of payments for merchandise: February March January es 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 Paid in.... February March 31 TotalJanuary March Payable Accounts Payable - January 1S 350,000 S 80,000 S 270,000 Merchandise purchases in: January February March $ 80 000 S 270,000 S 0 S Total cash paid for merchandise Required 5 Required 6 Cash Bud> sh Budget January, February, and March 2018 February January March Beginning cash balance 40 points Total cash available Cash payments for Book Print References Total cash payments Preliminary cash balance Ending cash balance Loan balance January February March Loan balance - Beginning of month Additional loan (loan repayment) Loan balance End of month Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Requhre Required 7Required S Calc Cash BudRequired 7 Required8 Budgeted income statement for the entire first quarter (not for each month). (Round your final answers to the nearest whole dollar.) DIMSDALE SPORTS Co Budgeted Income Statement For Three Months Ended March 31, 2018 Operating expenses Total operating expenses DIMSDALE SPORTS Co Budgeted Balance Sheet March 31, 2018 Assets Total current assets Equipment, net Total assets Liabilities and Equity Liabilities Bank loan payable Total liabilities Stockholders' Equity Total Stockholders' Equity Total Liabilities and Equity