Problem 22-8AA (Algo) Merchandising: Preparation of a complete master budget LO P4 Dimsdale Sports, a merchandising company, reports the following balance sheet at December 31 DINSDALE SPORTS COMPANY Balance Sheet December 31 Ansets Cash $ 21,500 Accounts receivable 520,000 Inventory 157,500 Equipment $ 612,000 LOOD Accumulated depreciation 76 500 535,500 Total Assets $ 1,234,500 Liabilities and Equity Liabilities Accounts payable $ 345,000 Loan payable 13,000 Taxes payable (due March 15) 90,000 448,000 Equity Common stock $ 471,500 Retained earnings 315,000 786,500 Total liabilities and equity $ 1,234,500 To prepare a master budget for January, February, and March, use the following information To prepare a master budget for January, February, and March, use the following information a. The company's single product is purchased for $30 per unit and resold for $60 per unit. The inventory level of 5,250 units on December 31 is more than management's desired level, which is 20% of the next month's budgeted sales units. Budgeted sales are January, 6,500 units: February 9,000 units; March 11,000 units; and April, 10,000 units. All sales are on credit b. Cash receipts from sales are budgeted as follows: January, $261,500, February, $743,705; March, $545,925. c. Cash payments for merchandise purchases are budgeted as follows: January $60,000; February, $303,300; March, $129,600 d. Sales commissions equal to 20% of sales dollars are paid each month Sa es salaries (excluding commissions) are $4,000 per month e. General and administrative salaries are $11,000 per month. Maintenance expense equals $2,200 per month and is pold in cash. f. New equipment purchases are budgeted as follows: January, $38,400, February, $103,200; and March, $21,600. Budgeted depreciation expense is January, $ 6,775; February, $7,850; and March $8,075. g. The company budgets a land purchase 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 an agreement with its bank to obtain additional loans as needed. The interest rate is 1% per month and interest is paid at each month-end based on the beginning-month balance. Partial or full payments on these loans are made on the last day of the month. The company maintains a minimum enling cash balance of $21,500 at the end of each month 1. The income tax rate for the company is 37%. Income taxes on the first quarter's income will not be paid until April 15 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 Sales budgets. DIMSDALE SPORTS Salos Budget January February March Totals 0 Budgeted sales units Selling price per unit Total budgeted sales 0 0 $ 0 0 $ Merchandise purchases budgets. DIMSDALE SPORTS Merchandise Purchases Budget January February March Next period budgeted sales units Ratio of inventory to future sales Desired ending inventory units Total required units Units to be purchased Cost per unit Cost of merchandise purchases Selling expense budgets. DIMSDALE SPORTS Selling Expense Budget January February March Budgeted sales Sales commissions General and administrative expense budgets. Hint: Depreciation is included in the general and administrative budget for merchandisers. DIMSDALE SPORTS General and Administrative Expense Budget January February March Total Total general and administrative expenses Capital expenditures budgets. DIMSDALE SPORTS Capital Expenditures Budget January February March Total capital expenditures DIMSDALE SPORTS COMPANY Cash Budget January February March Beginning cash balance Total cash available Less: Cash payments for: 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 Budgeted income statement for the entire first quarter (not for each monti dollar.) DIMSDALE SPORTS COMPANY Budgeted Income Statement For Three Months Ended March 31 Selling, general and administrative expenses Total operating expenses 0 0 $ 0 Budgeted balance sheet as of March 31. (Round your final answers to the nearest whole dollar) DIMSDALE SPORTS COMPANY Budgeted Balance Sheet March 31 Assets 0 Total assets Liabilities and Equity Liabilities 0 Equity 0 Total Liabilities and Equity