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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.

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 Accounts recelvable Inventory $ 18,000 262,500 75,000 Total current assets Equipment Less accumulated depreciation 355,500 33,750 236,250 $591,750 $270,000 Total assets Liabilities and Equity Accounts payable Bank loan payable Tax payable (due 3/15/2012) $180,000 7,500 45,000 Total liabilities Share capital-ordinary Retained earnings $232,500 236,250 123,000 Total stockholders' equity 359,250 Total liabilities and equity $591,750 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 $55 per unit. The expected inventory level of 2,500 units on December 31, 2011, is more than management's desired level for 2012, which is 20% of the next month's expected sales (in units). Expected sales are: January, 3,500 units; February, 4,500 units; March, 5,500 units; and April, 5,000 units. b. Cash sales and credit sales represent 25% and 75%, respectively, of total sales. Of the credit sales, 60% is collected in the first month after the month of sale and 40% in the second month after the month of sale For the December 31, 2011, accounts receivable balance, $62,500 is collected in January and the remaining $200,000 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 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 $55 per unit. The expected inventory level of 2,500 units on December 31, 2011, is more than management's desired level for 2012, which is 20% of the next month's expected sales (in units). Expected sales are: January, 3,500 units; February, 4,500 units; March, 5,500 units; and April, 5,000 units. b. Cash sales and credit sales represent 25% and 75%, respectively, of total sales. Of the credit sales, 60% is collected in the first month after the month of sale and 40% in the second month after the month of sale For the December 31, 2011, accounts recelvable balance, $62,500 is collected in January and the remaining $200,000 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, $40,000 is paid in January and the remaining $140,000 is paid in February d. Sales commissions equal to 20% of sales are paid each month. Sales salaries (excluding commissions) are e. General and administrative salaries are $72,000 per year. Maintenance expense equals $1,000 per month f. Equipment reported in the December 31, 2011, statement of financial position was purchased in January $30,000 per year and is paid in cash. 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, $18,000; February, $48,000; and March, $14,400. This equipment will be depreciated under the straight-line method over eight years with no residual value. A full month's 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 $75,000, 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 $12,500 in each month. l. The income tax rate for the company is 40%. Income tax on the first quarter's income will not be paid until April 15. Required Prepare a master budget for each of the first three months of 2012; include the following component budgets: 7. Budgeted income statement for the entire first quarter (not for each month). (Input all amounts as positive values. Omit the "$" sign in your response.) SIMID SPORTS CO Budgeted Income Statement For Three Months Ended March 31, 2012 Sales $ 742,500 Cost of goods sold 405,000 Gross profit 337500 Operating expenses $148,500 Sales commissions Sales salaries General administrative salaries Maintenance expense Depreciation expense Interest expense 18,000 Income tax Net profit 8. Budgeted statement of financial position as at March 31, 2012. (Input all amounts as positive values Be sure to list the assets in order of their liquidity. Leave no cells blank be certain to enter "O" wherever required. Omit the "$" sign in your response.) SIMID SPORTS CO Budgeted Statement of Financial Position March 31, 2012 Assets Cash Accounts receivable Inventory Total Current Assets Land Equipment Less: Accumulated depreciation Total Assets Liabilities and Equity Accounts payable Bank loan payable Tax payable Total Liabilities Share capital-ordinary Retained earnings Total Stockholders' Equity Total Liabilities & Equity