Near the end of 207, the manegment of Dimsdale sports Co.

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 Decenber 31, 2017 Assets s 36,500 Cash Accounts receivable Inventory Total current assets Equipment Less: accumulated depreciation 520,000 1000656,500 564,000 70,500 Equipment, net Total assets 493,500 $1,150,000 Liabilities and Equity 360,000 15,000 89,000 Accounts payable Bank loan payable Taxes payable (due 3/15/2018) Total 1iabilities Common stock Retained earnings Total stockholders equity Total 1iabilities and equity 464,000 472,500 213,500 686,000 1,150,000 To prepare a master budget for January, February, and March of 2018, management gathers the following information a. single product is purchased for $20 per unit and resold for $55 per unit. The expected inventory level of The company's 5,000 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, 7,250 units; February, 9,000 units; March, 11,000 units; and April, 9,000 units. first month after the month of sale and 37% 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 month after the month of purchase. For the December 31, 2017, accounts payable balance, $90,000 is paid in January and b. Cash sales and credit sales represent 25% and 75%, respectively, of total sales. Of the credit sales, 63% is collected in the c. Merchandise purchases are paid for as follows: 20% in the first month after the month of purchase and 80% in the second 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 $90,000 pe 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, 2017, balance sheet was purchased in January 2017. It is being depreciated over ight years under the straight-line method with no salvage value. The following amounts for new equipment purchases ar planned in the coming quarter: January, $38,460; February, $93,600; and March, $24,000. 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 land at the end of March at a cost of $150,000, 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 $21,288 at the end of each month. i. The income tax rate for the company is 37%. 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 5. Monthly capital expenditures budgets 6. Monthly cash budgets. 7. Budgeted income statement for the entire first quarternot for each month). 8. Budgeted balance sheet as of March 31, 2018. Complete this question by entering your answers in the tabs below. sReguired6Raeud Requ 7 Required 8 Requied1 Required 2 Required 3 Required 4 Required c Calc Monthly merchandise purchases budgets. DIMSDALE SPORTS co Merchandise Purchases Budget January, February, and March 2018 January February March 1 000 Next month's hudaeted sales funite Hecareequlred ? Required e Requred 1 Required 2 Required Required 4Required Monthly merchandise purchases budgets DIMSDALE SPORTS CO Merchandise Purchases Budget January, February, and March 2018 January February March 9,000 20% 11,000 9,000 20% Next month's budgeted sales (units) Ratio of inventory to future sales Budgeted ending inventory (units) Budgeted units sales for month Required units of available merchandise 20% Units to be purchased Required 1 Required 3> Required b equired o Required 7 Required 8 Required:" Required 2.equired3] Required 4 Required 1 Calc Cash Bud Required 7 Required8 Monthly selling expense budgets. DIMSDALE SPORTS COMPANY Selling Expense Budget January, February, and March 2018 January February March Budgeted sales Sales commissions Monthly general and administrative expense budgets. January February March $ 564,000 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 March Required 3 Required 5> Monthly capital expenditures budgets DIMSDALE SPORTS COMPANY Capital Expenditures Budget January, February, and March 2018 January February March Total Required 4 Required 6 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: January March February Sales in units Selling price per unit Total budgeted sales Cash sales Sales on credit 25% 75% Collected in March 31 Total January February March Receivable Accounts Receivable - January 520,000 30,000 390,000 Credit sales from: February March Total collection of receivables $130,000 390,000$ Total cash receipts from customers January February March Collections of receivables 12 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 Paid in February 270,000 March 31 Total January March Payable Accounts Payable - January 1 360,000S 90,000 Paid in March 31 Total January February March Payable 360,000 90,0002,000 Accounts Payable January 1 Merchandise purchases in: January February March 0 0 0 Total cash paid for merchandise $90,000 270,000 $ Required 5 Required 6 Cash Bud > 3 DIMSDALE SPORTS co Cash Budget January, February, and March 2018 January February March Beginning cash balance Total cash available Cash payments for: 0 Total cash payments Preliminary cash balance 0 0 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 6 Cale Required 7 3 DIMSDALE SPORTS CO Budgeted Income Statement For Three Months Ended March 31, 2018 Operating expenses Total operating expenses 3 DIMSDALE SPORTS CO. Budgeted Balance Sheet March 31, 2018 Assets Total current assets 0 Equipment, net Total assets Liabilities and Equity Liabilities Bank loan payable Total liabilities Stockholders' Equity 0 Equipment, net Total assets Liabilities and Equity Liabilities Bank loan payable Total liabilities Stockholders' Equity Total Stockholders' Equity Total Liabilities and Equity 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 Decenber 31, 2017 Assets s 36,500 Cash Accounts receivable Inventory Total current assets Equipment Less: accumulated depreciation 520,000 1000656,500 564,000 70,500 Equipment, net Total assets 493,500 $1,150,000 Liabilities and Equity 360,000 15,000 89,000 Accounts payable Bank loan payable Taxes payable (due 3/15/2018) Total 1iabilities Common stock Retained earnings Total stockholders equity Total 1iabilities and equity 464,000 472,500 213,500 686,000 1,150,000 To prepare a master budget for January, February, and March of 2018, management gathers the following information a. single product is purchased for $20 per unit and resold for $55 per unit. The expected inventory level of The company's 5,000 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, 7,250 units; February, 9,000 units; March, 11,000 units; and April, 9,000 units. first month after the month of sale and 37% 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 month after the month of purchase. For the December 31, 2017, accounts payable balance, $90,000 is paid in January and b. Cash sales and credit sales represent 25% and 75%, respectively, of total sales. Of the credit sales, 63% is collected in the c. Merchandise purchases are paid for as follows: 20% in the first month after the month of purchase and 80% in the second 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 $90,000 pe 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, 2017, balance sheet was purchased in January 2017. It is being depreciated over ight years under the straight-line method with no salvage value. The following amounts for new equipment purchases ar planned in the coming quarter: January, $38,460; February, $93,600; and March, $24,000. 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 land at the end of March at a cost of $150,000, 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 $21,288 at the end of each month. i. The income tax rate for the company is 37%. 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 5. Monthly capital expenditures budgets 6. Monthly cash budgets. 7. Budgeted income statement for the entire first quarternot for each month). 8. Budgeted balance sheet as of March 31, 2018. Complete this question by entering your answers in the tabs below. sReguired6Raeud Requ 7 Required 8 Requied1 Required 2 Required 3 Required 4 Required c Calc Monthly merchandise purchases budgets. DIMSDALE SPORTS co Merchandise Purchases Budget January, February, and March 2018 January February March 1 000 Next month's hudaeted sales funite Hecareequlred ? Required e Requred 1 Required 2 Required Required 4Required Monthly merchandise purchases budgets DIMSDALE SPORTS CO Merchandise Purchases Budget January, February, and March 2018 January February March 9,000 20% 11,000 9,000 20% Next month's budgeted sales (units) Ratio of inventory to future sales Budgeted ending inventory (units) Budgeted units sales for month Required units of available merchandise 20% Units to be purchased Required 1 Required 3> Required b equired o Required 7 Required 8 Required:" Required 2.equired3] Required 4 Required 1 Calc Cash Bud Required 7 Required8 Monthly selling expense budgets. DIMSDALE SPORTS COMPANY Selling Expense Budget January, February, and March 2018 January February March Budgeted sales Sales commissions Monthly general and administrative expense budgets. January February March $ 564,000 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 March Required 3 Required 5> Monthly capital expenditures budgets DIMSDALE SPORTS COMPANY Capital Expenditures Budget January, February, and March 2018 January February March Total Required 4 Required 6 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: January March February Sales in units Selling price per unit Total budgeted sales Cash sales Sales on credit 25% 75% Collected in March 31 Total January February March Receivable Accounts Receivable - January 520,000 30,000 390,000 Credit sales from: February March Total collection of receivables $130,000 390,000$ Total cash receipts from customers January February March Collections of receivables 12 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 Paid in February 270,000 March 31 Total January March Payable Accounts Payable - January 1 360,000S 90,000 Paid in March 31 Total January February March Payable 360,000 90,0002,000 Accounts Payable January 1 Merchandise purchases in: January February March 0 0 0 Total cash paid for merchandise $90,000 270,000 $ Required 5 Required 6 Cash Bud > 3 DIMSDALE SPORTS co Cash Budget January, February, and March 2018 January February March Beginning cash balance Total cash available Cash payments for: 0 Total cash payments Preliminary cash balance 0 0 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 6 Cale Required 7 3 DIMSDALE SPORTS CO Budgeted Income Statement For Three Months Ended March 31, 2018 Operating expenses Total operating expenses 3 DIMSDALE SPORTS CO. Budgeted Balance Sheet March 31, 2018 Assets Total current assets 0 Equipment, net Total assets Liabilities and Equity Liabilities Bank loan payable Total liabilities Stockholders' Equity 0 Equipment, net Total assets Liabilities and Equity Liabilities Bank loan payable Total liabilities Stockholders' Equity Total Stockholders' Equity Total Liabilities and Equity