The following information applies to the questions displayed below.]

Near the end of 2011, the management of Simid Sports Co., a merchandising company, prepared the following estimated statement of financial position for December 31, 2011.

SIMID SPORTS COMPANY Estimated Statement of Financial position December 31, 2011
Assets
Cash				$	35,500
Accounts receivable					520,000
Inventory					150,000
Total current assets					705,500
Equipment	$	544,000
Less accumulated depreciation		68,000			476,000
Total assets				$	1,181,500
Liabilities and Equity
Accounts payable	$	360,000
Bank loan payable		15,000
Tax payable (due 3/15/2012)		92,000
Total liabilities				$	467,000
Share capitalordinary		473,500
Retained earnings		241,000
Total stockholders equity					714,500
Total liabilities and equity				$	1,181,500

To prepare a master budget for January, February, and March of 2012, management gathers the following information.

a.	Simid Sports single product is purchased for $30 per unit and resold for $57 per unit. The expected inventory level of 5,000 units on December 31, 2011, is more than managements desired level for 2012, which is 20% of the next months expected sales (in units). Expected sales are: January, 7,250 units; February, 8,750 units; March, 10,500 units; and April, 11,000 units.
b.	Cash sales and credit sales represent 25% and 75%, 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, 2011, 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, 2011, accounts payable balance, $80,000 is paid in January and the remaining $280,000 is paid in February.
d.	Sales commissions equal to 20% of sales are paid each month. Sales salaries (excluding commissions) are $66,000 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, 2011, statement of financial position was purchased in January 2011. It is being depreciated over eight years under the straight-line method with no residual value. The following amounts for new equipment purchases are planned in the coming quarter: January, $35,000; February, $96,000; and March, $29,500. This equipment will be depreciated under the straight-line method over eight years with no residual value. A full months depreciation is taken for the month in which equipment is purchased.
g.	The company plans to acquire 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.	Simid Sports 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 $36,513 in each month.
i.	The income tax rate for the company is 43%. Income tax 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 2012; include the following component budgets:

4.	Monthly general and administrative expense budgets. (Do not round your intermediate calculations. Round your final answers to the nearest whole dollar. Omit the "$" sign in your response.)

SIMID SPORTS CO. General and Administrative Expense Budget January, February, and March 2012
	January	February	March	Total
(Click to select)Rent expenseLand purchasesSalariesSales salariesEquipment purchases	$	$	$	$
(Click to select)Equipment purchasesLand purchasesRent expenseSales salariesMaintenance
(Click to select)Land purchasesDepreciationRent expenseEquipment purchasesSales salaries
Total expenses	$	$	$	$

5.	Monthly capital expenditures budgets. (Leave no cells blank - be certain to enter "0" wherever required. Input all amounts as positive values. Omit the "$" sign in your response.)

SIMID SPORTS CO. Capital Expenditures Budget January, February, and March 2012
	January	February	March
(Click to select)SalariesMaintenanceDepreciationEquipment purchasesPayments for merchandise	$	$	$
(Click to select)Payments for merchandiseDepreciationMaintenanceLand purchaseSalaries
Total	$	$	$

6.

Monthly cash budgets. (Leave no cells blank - be certain to enter "0" wherever required. Input all amounts as positive values except negative preliminary cash balance and repayment of loan to bank which should be indicated by a minus sign. Round your intermediate calculations and final answers to the nearest dollar amount. Omit the "$" sign in your response.)

SIMID SPORTS CO. Cash Budget January, February, and March 2012
	January	February	March
(Click to select)Beginning cash balanceEnding cash balanceDepreciationSales salariesCash receipts from customers	$	$	$
(Click to select)Cash receipts from customersPayments for merchandisePurchase of landSales commissionsInterest
Total cash available
Cash disbursements
(Click to select)DepreciationCash receipts from customersBeginning cash balancePayments for merchandiseMaintenance
(Click to select)Cash receipts from customersSales commissionsBeginning cash balanceDepreciationRepayment of loan to bank
(Click to select)DepreciationCash receipts from customersSales salariesRepayment of loan to bankBeginning cash balance
(Click to select)Cash receipts from customersDepreciationBeginning cash balanceGeneral & administrative salariesRepayment of loan to bank
(Click to select)Maintenance expenseRepayment of loan to bankDepreciationCash receipts from customersBeginning cash balance
(Click to select)InterestRepayment of loan to bankBeginning cash balanceDepreciationCash receipts from customers
(Click to select)Cash receipts from customersTax payableBeginning cash balanceRepayment of loan to bankDepreciation
(Click to select)DepreciationBeginning cash balanceCash receipts from customersRepayment of loan to bankPurchases of equipment
(Click to select)Purchase of landDepreciationBeginning cash balanceCash receipts from customersRepayment of loan to bank
Total cash disbursements
(Click to select)Ending cash balanceInterestLoan balance, end of monthBeginning cash balancePreliminary cash balance
(Click to select)Repayment of loan to bankInterestBeginning cash balanceLoan balance, end of monthEnding cash balance
(Click to select)Ending cash balancePreliminary cash balanceInterestRepayment of loan to bankBeginning cash balance	$	$	$
(Click to select)Preliminary cash balanceRepayment of loan to bankLoan balance, end of monthBeginning cash balanceEnding cash balance	$	$	$