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 $35,000 520,000 100,000 Cash Accounts receivable Inventory Total current assets Equipment Less accumulated depreciation 655,000 472,500 $ 1,127,500 $540,000 67,500 Total assets Liabilities and Equity Accounts payable Bank loan payable Tax payable (due 3/15/2012) $375,000 15,000 91,000 $ 481,000 Total liabilities Share capital-ordinary Retained earnings 473,500 173,000 646,500 Total stockholders' equity $ 1,127,500 Total liabilities and equity 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 $20 per unit and resold for $55 per unit. The expected inventory level of 5,000 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, 6,750 units; February, 9,250 units; March, 11,000 units; and April, 10,500 units b. Cash sales and credit sales represent 20% and 80%, respectively, of total sales. Of the credit sales, 59% is collected in the first month after the month of sale and 41% in the second month after the month of sale. For the December 31, 2011, accounts receivable balance, $125,000 is collected in January and the remaining $395,000 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, $90,000 is paid in January and the remaining $285,000 is paid in February $84,000 per year. month and is paid in cash d. Sales commissions equal to 20% of sales are paid each month. Sales salaries (excluding commissions) are e. General and administrative salaries are $132,000 per year. Maintenance expense equals $2,000 per 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, $94,000; and March, $30,000. 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 $145,000, 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 $-150 in each month i. The income tax rate for the company is 41%. Income tax on the first quarter's income will not be paid until April 15 Required Prepare a master budget for each of the first three months of 2012; include the following component budgets 1. Monthly sales budgets. (Omit the "$" sign in your response.) SIMID SPORTS CO Sales Budget January, February, and March 2012 Budgeted Units Budgeted Unit Price Budgeted Total Dollars 371250 508750 605000 6750 $ 9250 11000 55 $ January 2012 February 2012 March 2012 $ 1485000 Total for the first quarter 27000 2. Monthly merchandise purchases budgets. (Units to be deducted should be indicated with a minus sign. Omit the "S" & '%" signs in your response.) SIMID SPORTS CO Merchandise Purchases Budget January, February, and March 2012 Total Februan March Januan Next month's budgeted sales 6750 9250 11000 20 20 Ratio of inventory to future sales 7 20 % 2200 11450 2100 13100 Budgeted beginning inventory Budgeted ending invento 1850 8600 5000 3600 1850 9600 2200 10900 Beginning inventor Budgeted merchandise purchases Budgeted cost per unit 2000 2000 2000 72000$ 72000 $ Budgeted merchandise purchases v Budgeted merchandise purchases 192000 218000 $ 92000 S218000 $ 3. Monthly selling expense budgets. (Omit the "S" & "%" signs in your response.) SIMID SPORTS CO Selling Expense Budget January, February, and March 2012 January February March Total Sales commissions expense Sales commission percent Sales salaries Budgeted sales Total selling expenses 4. Monthly general and administrative expense budgets. (Do not round your intermediate calculations. Round your final answers to the nearest whole dollar. Omit the "$" sign in your response.) SIMID SPORTS CO. General and Administrative Expense Budget January, February, and March 2012 Total February March January Salaries Rent expense (Click to select) Total expenses 5. Monthly capital expenditures budgets. (Leave no cells blank - be certain to enter "o" wherever required. Input all amounts as positive values. Omit the "$" sign in your response.) SIMID SPORTS CO Capital Expenditures Budget January, February, and March 2012 January March February 35000 $ 30000 145000 Equipment purchases Land purchase 94000 $ Total $ 35000 $ 94000$75000 6. Monthly cash budgets. (Leave no cells blank be certain to enter "0" wherever required. Input all amounts as positive values except negative preliminary cash balance and repayment of loan to bank which should be indicated by a minus sign. Round your intermediate calculations and final answers to the nearest dollar amount. Omit the "$" sign in your response.) SIMID SPORTS CO Cash Budget January, February, and March 2012 Januar Februan March Click to select Click to select Total cash available Cash disbursements (Click to select) Click to select (Click to select) Click to select (Click to select) Click to select (Click to select) Click to select Click to select Total cash disbursements Click to select Click to select Click to select Click to select 7. Budgeted income statement for the entire first quarter (not for each month). (Round your answers to the nearest dollar amount. Input all amounts as positive values. Omit the "$" sign in your response.) SIMID SPORTS CO Budgeted Income Statement For Three Months Ended March 31, 2012 Sales Cost of goods sold Gross profit Operating expenses General administrative salaries v (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) 8. Budgeted statement of financial position as at March 31, 2012. (Be sure to list the assets in order of their liquidity. Round your answers to the nearest dollar amount. Leave no cells blank - be certain to enter "0" wherever required. Input all amounts as positive values. Round your intermediate calculations and final answers to the nearest dollar amount. Omit the "$" sign in your response.) SIMID SPORTS CO Budgeted Statement of Financial Position March 31, 2012 Assets Click to select Click to select Click to select Total Current Assets Click to select Click to select Click to select Total Assets Liabilities and Equity Click to select Click to select Click to select Total Liabilities Click to select Click to select Total Stockholders' Equity Total Liabilities&Equity