. The company budgets a land purchase at the end of March at a cost of $180.000, which will be paid with cash on the last day of the mont h. The company has an agreement with its bank to obtain additional loans as needed. The Interest rate is 1k per month and Interestis 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 $20,500 at the end of each month. 1. The income tax rate for the company is 39%. 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 merchandiser 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. Required Hered Red Required Red ad 3 Required Sales budgets DESDALE SPORTS Mart 10.500 2.000 Budget Deling pricepunt To budete 5 7.750 sas 301.500 507.500 5 600.000 1.000.000 Required 2 > Dimsdale Sports, a merchandising company, reports the following balance sheet at December 31. DIMSDALE SPORTS COMPANY Balance Sheet December 31 Assets Cash $ 20,500 Accounts receivable 520,000 Inventory 110,000 Equipment $540,000 Lost accumulated depreciation 67,500 472,500 Total ansat $ 1,123,000 Liabilition and Equity Liabilities Accounts payable $ 380,000 Loan payable 12,000 Taxes payable (due March 15) 89,000 481,000 Equity Common stock $ 474,000 Retained sarnings 160.000 642.000 Total liabilities and equity $1,123,000 To prepare a master budget for January, February, and March, use the following Information month a. The company's single product is purchased for $20 per unit and resold for $58 per unit. The inventory level of 5,500 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, 6.750 units, February 8,750 units, March 10,500 units; and April, 10,500 units. All sales are on credit. b. Cash receipts from sales are budgeted as follows: January, $262,025, February, $727,855; March, $513,619. c. Cash payments for merchandise purchases are budgeted as follows: January $65,000; February, $327000; March, $84,400. d. Sales commissions equal to 20% of sales dollars are paid each month. Soles salaries (excluding commissions) are $5,000 per e. General and administrative salaries are $12,000 per month. Mointenance expense equals $2,200 per month and is paid in cash. 1. New equipment purchases are budgeted as follows: January, $38,400; February $93,600; and March. $24,000. Budgeted depreciation expense is January, $ 6,025, February, $7,000; and March, $7.250 9. The company budgets a land purchase at the end of March at a cost of $180,000, which will be paid with cash on the last day of the h. The company has an agreement with its bank to obtain additional loans as needed. The interest rate is 1% per month and interestis paid at each month-end based on the beginning-month balance. Portal or full payments on these loans are made on the last day of the month. The company maintains a minimum ending cash balance of $20,500 at the end of each month, 1. The income tax rate for the company is 39%. Income taxes on the first quarter's Income will not be pald until April 15. month 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
