Near the end of 2019, the management of Dimsdale Sports Co., a merchandising company, prepared the following estimated balance sheet for December 31, 2019. $ 650,500 DIMSDALE SPORTS COMPANY Estimated Balance Sheet December 31, 2019 Assets Cash $ 35,500 Accounts receivable 520, eee Inventory 95,000 Total current assets Equipment 600, eee Less: Accumulated depreciation 75,000 Equipment, net Total assets Liabilities and Equity Accounts payable $ 350,000 Bank loan payable 12, eee Taxes payable (due 3/15/2020) 89. Bee Total liabilities Common stock 474,500 Retained earnings 25e,eee Total stockholders' equity Total liabilities and equity 525,000 $1,175,500 $ 451, 724,500 $1,175,500 To prepare a master budget for January, February, and March of 2020, management gathers the following Information. a. The company's single product is purchased for $20 per unit and resold for $56 per unit. The expected Inventory level of 4,750 units on December 31, 2019, is more than management's desired level, which is 20% of the next month's expected sales (In units). Expected sales are January, 6,500 units; February, 8,500 units, March, 10,750 units, and April, 9,000 units. b. Cash sales and credit sales represent 25% and 75%, respectively, of total sales. Of the credit ond month after the month of sale. For the December 31, 2019, accounts receivable balance, $130,000 Is collected in January 2020 and the remaining $390,000 is collected in February 2020. 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, 2019, accounts payable balance, $65,000 is pald in January 2020 and the remaining $285,000 Is pald In February 2020. d. Sales commissions equal to 20% of sales are pald each month. Sales salarles (excluding commissions) are $60,000 per year. e. General and administrative salaries are $156,000 per year. Maintenance expense equals $1,900 per month and is paid in cash. f. Equipment reported in the December 31, 2019, balance sheet was purchased in January 2019. It is being depreciated over elght ars under the straight-line method with no salvage value. The following amounts for new equipment purchases are plan coming quarter: January, $33,600, February, $98,400, and March, $19,200. This equipment will be depreciated under the straight- line method over elght 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 land at the end of March at a cost of $155,000, which will be pald 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 $48,000 at the end of each month. 1. The Income tax rate for the company is 39%. Income taxes on the first quarter's Income will not be paid until April 15. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Calc Required 6 Cash Bud Required 7 Required 8 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: January February March Sales in units Selling price per unit Total budgeted sales Cash sales 25% 75% Sales on credit March 31 ------------------Collected in-------------- January February March $ 130,000 $ 390,000 Total 520,000 Receivable $ Accounts Receivable - January 1 Credit sales from: January February March Total collection of receivables $ 130,000 $ 390,000 $ 0 $ Total cash receipts from customers January February March Collections of receivables Calculation of payments for merchandise: January February March 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 March 31 ----------------Paid in ...... January February 65,000 $ 285,000 .. March Total 350,000 Payable $ $ Accounts Payable - January 1 Merchandise purchases in: January February March Total cash paid for merchandise $ 65,000 285,000 S O S 0 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.) 5 March 216,310 474,740 691,050 DIMSDALE SPORTS CO. Cash Budget January, February, and March 2020 January February $ 35,500 $ 53,080 Cash receipts from customers 221,000 675,530 Total cash available 256,500 728,610 Cash payments for: Merchandise 65,000 298.800 Sales salaries 5,000 5,000 Sales commissions 72,800 95,200 General & administrative salaries 13.000 13.000 Maintenance expense 1,900 1,900 Purchases of equipment 33,800 98,400 Purchase of land Taxes payable Interest on bank loan 91.000 5,000 120,400 13,000 1,900 19,200 155,000 191,300 512,300 494,500 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 Budgeted balance sheet as of March 31, 2020. (Round your final answers to the nearest whole dollar.) DIMSDALE SPORTS CO. Budgeted Balance Sheet March 31, 2020 Assets Cash Accounts receivable Merchandise Inventory Total current assets Land Equipment, net Total assets Liabilities and Equity Liabilities Bank loan payable Total liabilities Stockholders' Equity Total Stockholders' Equity Total Liabilities and Equity