{ "key_pair_value_system": true, "answer_rating_count": "", "question_feedback_html": { "html_star": "", "html_star_feedback": "" }, "answer_average_rating_value": "", "answer_date_js": "2024-06-28T07:00:39-04:00", "answer_date": "2024-06-28 07:00:39", "is_docs_available": null, "is_excel_available": null, "is_pdf_available": null, "count_file_available": 0, "main_page": "student_question_view", "question_id": "4259641", "url": "\/study-help\/questions\/transcribed-image-text-problem-208aa-algo-merchandising-preparation-of-4259641", "question_creation_date_js": "2024-06-28T07:00:39-04:00", "question_creation_date": "Jun 28, 2024 07:00 AM", "meta_title": "[Solved] Problem 20-8AA (Algo) Merchandising: Prep | SolutionInn", "meta_description": "Answer of - Problem 20-8AA (Algo) Merchandising: Preparation of a complete master budget LO P4 Dimsdale Sports, a merchandising co | SolutionInn", "meta_keywords": "problem,20-8aa,algo,merchandising,preparation,complete,master,budget,lo,p4,dimsdale,sports", "question_title_h1": "Problem 20-8AA (Algo) Merchandising: Preparation of a complete master budget LO P4 Dimsdale Sports, a merchandising company, reports the following balance sheet at December 31", "question_title": "Problem 20-8AA (Algo) Merchandising: Preparation of a complete master budget LO P4", "question_title_for_js_snippet": "Problem 20 8AA (Algo) Merchandising Preparation of a complete master budget LO P4 Dimsdale Sports, a merchandising company, reports the following balance sheet at December 31 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 $56 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, 8,500 units March, 11,250 units and April, 10,500 units All sales are on credit b Cash receipts from sales are budgeted as follows January, $257 , 400 February, $696 , 194 March, $500 , 052 c Cash payments for merchandise purchases are budgeted as follows January, $60 , 000 February, $312 , 700 March, $125 , 100 d Sales commissions equal to 20 of sales dollars are paid each month Sales salaries (excluding commissions) are $7 , 500 per month e General and administrative salaries are $13 , 000 per month Maintenance expense equals $1 , 900 per month and is paid in cash f New equipment purchases are budgeted as follows January, $33 , 600 February, $93 , 600 and March, $21 , 600 Budgeted depreciation expense is January, $6 , 975 February, $7 , 950 and March, $8 , 175 g The company budgets a land purchase at the end of March at a cost of $175 , 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 ending cash balance of $21 , 000 at the end of each month i The income tax rate for the company is 41 Income taxes on the first quarter's income will not be paid until April 15 Required Prepare a master budget for the months of January, February, and March that has the following budgets 1 Sales budgets 2 Merchandise purchases budgets 3 Selling expense budgets 4 General and administrative expense budgets Hint Depreciation is included in the general and administrative budget for merchandisers 5 Capital expenditures budgets 6 Cash budgets 7 Budgeted income statement for entire quarter (not monthly) ended March 31 8 Budgeted balance sheet as of March 31 Complete this question by entering your answers in the tabs below Sales budgets Merchandise purchases budgets Selling expense budgets General and administrative expense budgets Hint Depreciation is included in the general and administrative budget for merchandisers Capital expenditures budgets DIMSDALE SPORTS COMPANY Budgeted Balance Sheet", "question_description": "

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<\/p> Problem 20-8AA (Algo) Merchandising: Preparation of a complete master budget LO P4 Dimsdale Sports, a merchandising company, reports the following balance sheet at December 31 . 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 $56 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, 8,500 units; March, 11,250 units; and April, 10,500 units. All sales are on credit. b. Cash receipts from sales are budgeted as follows: January, $257 , 400 ; February, $696 , 194 ; March, $500 , 052 . c. Cash payments for merchandise purchases are budgeted as follows: January, $60 , 000 ; February, $312 , 700 ; March, $125 , 100 . d. Sales commissions equal to 20% of sales dollars are paid each month. Sales salaries (excluding commissions) are $7 , 500 per month. e. General and administrative salaries are $13 , 000 per month. Maintenance expense equals $1 , 900 per month and is paid in cash. f. New equipment purchases are budgeted as follows: January, $33 , 600 ; February, $93 , 600 ; and March, $21 , 600 . Budgeted depreciation expense is January, $6 , 975 ; February, $7 , 950 ; and March, $8 , 175 . g. The company budgets a land purchase at the end of March at a cost of $175 , 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 ending cash balance of $21 , 000 at the end of each month. i. The income tax rate for the company is 41% . Income taxes on the first quarter's income will not be paid until April 15. Required: Prepare a master budget for the months of January, February, and March that has the following budgets: 1. Sales budgets. 2. Merchandise purchases budgets. 3. Selling expense budgets. 4. General and administrative expense budgets. Hint: Depreciation is included in the general and administrative budget for merchandisers. 5. Capital expenditures budgets. 6. Cash budgets. 7. Budgeted income statement for entire quarter (not monthly) ended March 31. 8. Budgeted balance sheet as of March 31 . Complete this question by entering your answers in the tabs below. Sales budgets. Merchandise purchases budgets. Selling expense budgets. General and administrative expense budgets. Hint: Depreciation is included in the general and administrative budget for merchandisers. Capital expenditures budgets. DIMSDALE SPORTS COMPANY Budgeted Balance Sheet", "transcribed_text": "", "related_book": { "title": "Managerial Accounting Tools for Business Decision Making ", "isbn": "1118856996, 978-1118856994", "edition": "4th Canadian edition", "authors": "Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso, Ibrahim M. Aly", "cover_image": "https:\/\/dsd5zvtm8ll6.cloudfront.net\/si.question.images\/book_images\/1190.jpg", "uri": "\/textbooks\/managerial-accounting-tools-for-business-decision-making-4th-canadian-edition-1190", "see_more_uri": "" }, "free_related_book": { "isbn": "1782547347", "uri": "\/textbooks\/economic-and-natural-disasters-since-1900-a-comparative-history-1st-edition-978-1782547341-283254", "name": "Economic And Natural Disasters Since 1900 A Comparative History", "edition": "1st Edition" }, "question_posted": "2024-06-28 07:00:39", "see_more_questions_link": "\/study-help\/questions\/business-marketing-2022-June-08", "step_by_step_answer": "The Answer is in the image, click to view ...", "students_also_viewed": [ { "url": "\/multiple-choice-questions-a-an-auditor-most-likely-would-make", "description": "Multiple Choice Questions a. An auditor most likely would make inquiries of production and sales personnel concerning possible obsolete inventory to address: (1) Valuation. 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