Problem 7-8AA (Algo) Merchandising: Preparation of a complete master budget LO P4 Dimsdale Sports, a merchandising...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Problem 7-8AA (Algo) Merchandising: Preparation of a complete master budget LO P4 Dimsdale Sports, a merchandising company, reports the following balance sheet at December 31 DINSDALE SPORTS COMPANY Balance Sheet December 31 Assets Cash Accounts receivable Inventory Equipment Less: Accumulated depreciation Total assets Liabilities and Equity Liabilities Accounts payable Loan payable Taxes payable (due March 15) Equity $ 576,000 72,000 $ 340,000 13,000 89,000 $ 21,500 520,000 95,000 $ 471,000 227,500 504,000 $1,140,500 442,000 Common stock Retained earnings 698,500 Total liabilities and equity $ 1,140,500 To prepare a master budget for January, February, and March, use the following information. a. The company's single product is purchased for $20 per unit and resold for $57 per unit. The inventory level of 4.750 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, 7,500 units; February, 8,750 units; March, 11,000 units; and April, 9,000 units. All sales are on credit. b. Cash receipts from sales are budgeted as follows: January, $269,625; February, $732,952: March, $523,723. c. Cash payments for merchandise purchases are budgeted as follows: January, $70,000: February, $288.000; March, $108.800. d. Sales commissions equal to 20% of sales dollars are paid each month. Sales salaries (excluding commissions) are $7,000 per month. e. General and administrative salaries are $12.000 per month. Maintenance expense equals $1,800 per month and is paid in cash f. New equipment purchases are budgeted as follows: January, $38,400: February $91.200, and March, $24,000. Budgeted depreciation expense is January, $ 6,400: February, $7,350; and March, $7,600 g. The company budgets a land purchase at the end of March at a cost of $140.000, 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 $21,500 at the end of each month. i. The income tax rate for the company is 43%. 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Sales budgets. Budgeted sales units Selling price per unit Total budgeted sales Required 3 Required 4 DIMSDALE SPORTS Sales Budget January February Required 1 Required 5 Required 6 March Totals Required 2 > I Required 7 Required 8 Merchandise purchases budgets. Next period budgeted sales units Ratio of inventory to future sales Desired ending inventory units Total required units Units to be purchased Cost per unit Cost of merchandise purchases DIMSDALE SPORTS Merchandise Puprases Budget February January < Required 1 Required 3 > March Required 1 Required 2. Selling expense budgets. Budgeted sales Sales commissions Required 3 Required 4 DIMSDALE SPORTS Selling Expense Budget January Required 5 February < Required 2 Required 6 March Required 4 > Required 7 Required 8 Complete this question by entering your answers in the tabs below. Required 1 Required 2 General and administrative merchandisers. Required 3 Required 4 Required 5 Required 6 Required 7 Required expense budgets. Hint: Depreciation is included in the general and administrative budget for DIMSDALE SPORTS General and Administrative Expense Budget January February Total general and administrative expenses < Required 3 March Required 5 > Total Capital expenditures budgets. Total capital expenditures DIMSDALE SPORTS Capital Expenditures Budget February January < Required 4 March Required 6 > Cash budgets. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to the nearest whole dollar.) Beginning cash balance Total cash available Less Cash payments for Total cash payments Preliminary cash balance Ending cash balance DIMSDALE SPORTS COMPANY Cash Budget Loan balance - Beginning of month Additional loan (loan repayment) Loan balance End of month January Loan balance January < Required 5 February February March March Required 7 > Budgeted income statement for the entire first quarter (not for each month). (Round your final answers to the nearest whole dollar.) DIMSDALE SPORTS COMPANY Budgeted Income Statement For Three Months Ended March 31 Selling, general and administrative expenses Total operating expenses < Required 6 Required 8 Budgeted balance sheet as of March 31. (Round your final answers to the nearest whole dollar.) DIMSDALE SPORTS COMPANY Budgeted Balance Sheet March 31 Assets Total assets Liabilities Equity Total Liabilities and Equity Liabilities and Equity Problem 7-8AA (Algo) Merchandising: Preparation of a complete master budget LO P4 Dimsdale Sports, a merchandising company, reports the following balance sheet at December 31 DINSDALE SPORTS COMPANY Balance Sheet December 31 Assets Cash Accounts receivable Inventory Equipment Less: Accumulated depreciation Total assets Liabilities and Equity Liabilities Accounts payable Loan payable Taxes payable (due March 15) Equity $ 576,000 72,000 $ 340,000 13,000 89,000 $ 21,500 520,000 95,000 $ 471,000 227,500 504,000 $1,140,500 442,000 Common stock Retained earnings 698,500 Total liabilities and equity $ 1,140,500 To prepare a master budget for January, February, and March, use the following information. a. The company's single product is purchased for $20 per unit and resold for $57 per unit. The inventory level of 4.750 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, 7,500 units; February, 8,750 units; March, 11,000 units; and April, 9,000 units. All sales are on credit. b. Cash receipts from sales are budgeted as follows: January, $269,625; February, $732,952: March, $523,723. c. Cash payments for merchandise purchases are budgeted as follows: January, $70,000: February, $288.000; March, $108.800. d. Sales commissions equal to 20% of sales dollars are paid each month. Sales salaries (excluding commissions) are $7,000 per month. e. General and administrative salaries are $12.000 per month. Maintenance expense equals $1,800 per month and is paid in cash f. New equipment purchases are budgeted as follows: January, $38,400: February $91.200, and March, $24,000. Budgeted depreciation expense is January, $ 6,400: February, $7,350; and March, $7,600 g. The company budgets a land purchase at the end of March at a cost of $140.000, 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 $21,500 at the end of each month. i. The income tax rate for the company is 43%. 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Sales budgets. Budgeted sales units Selling price per unit Total budgeted sales Required 3 Required 4 DIMSDALE SPORTS Sales Budget January February Required 1 Required 5 Required 6 March Totals Required 2 > I Required 7 Required 8 Merchandise purchases budgets. Next period budgeted sales units Ratio of inventory to future sales Desired ending inventory units Total required units Units to be purchased Cost per unit Cost of merchandise purchases DIMSDALE SPORTS Merchandise Puprases Budget February January < Required 1 Required 3 > March Required 1 Required 2. Selling expense budgets. Budgeted sales Sales commissions Required 3 Required 4 DIMSDALE SPORTS Selling Expense Budget January Required 5 February < Required 2 Required 6 March Required 4 > Required 7 Required 8 Complete this question by entering your answers in the tabs below. Required 1 Required 2 General and administrative merchandisers. Required 3 Required 4 Required 5 Required 6 Required 7 Required expense budgets. Hint: Depreciation is included in the general and administrative budget for DIMSDALE SPORTS General and Administrative Expense Budget January February Total general and administrative expenses < Required 3 March Required 5 > Total Capital expenditures budgets. Total capital expenditures DIMSDALE SPORTS Capital Expenditures Budget February January < Required 4 March Required 6 > Cash budgets. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to the nearest whole dollar.) Beginning cash balance Total cash available Less Cash payments for Total cash payments Preliminary cash balance Ending cash balance DIMSDALE SPORTS COMPANY Cash Budget Loan balance - Beginning of month Additional loan (loan repayment) Loan balance End of month January Loan balance January < Required 5 February February March March Required 7 > Budgeted income statement for the entire first quarter (not for each month). (Round your final answers to the nearest whole dollar.) DIMSDALE SPORTS COMPANY Budgeted Income Statement For Three Months Ended March 31 Selling, general and administrative expenses Total operating expenses < Required 6 Required 8 Budgeted balance sheet as of March 31. (Round your final answers to the nearest whole dollar.) DIMSDALE SPORTS COMPANY Budgeted Balance Sheet March 31 Assets Total assets Liabilities Equity Total Liabilities and Equity Liabilities and Equity
Expert Answer:
Related Book For
Posted Date:
Students also viewed these accounting questions
-
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...
-
Isle Corp., 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 companys...
-
The Jawarski Company has the following balance sheet data ($ in millions): Net income for 20X1 was $55 million. Net cash inflow from operating activities was $88 million. Cash dividends paid were $14...
-
Plot the six risks on a probability/impact matrix using the project impact matrix 2023 template. Write one to two sentences stating the rationale for how you determined the quadrant placement for...
-
The following are typical disclosures that would appear in the notes accompanying financial statements. For each of the items listed, indicate where the disclosure would likely appeareither in (A)...
-
17. Express the sum using summation notation. Use i for the index of summation. 1 2 + 3 4 3 + + 5 + 18 20
-
On the fifth floor of the physics building, you are in a laboratory class studying induction. You are using a computer to measure emf values from a solenoid when suddenly a thunderstorm breaks out....
-
Mortar Corporation acquired 80 percent ownership of Granite Company on January 1, 20X7, for $173,000. At that date, the fair value of the noncontrolling interest was $43,250. The trial balances for...
-
Which three design considerations to limit the scope of EIGRP queries are correct?
-
Pender Corp. paid $234,000 for a 30% interest in Saltspring Limited on January 1, Year 6. During Year 6, Saltspring paid dividends of $100,000 and reported profit as follows: Profit before...
-
Compose an enterprise security plan consisting of an incident response plan, disaster recovery plan, and business continuity plan for the following company. ACME Corp is a federal contractor that...
-
Assignment 5 uec 444 Make sure to provide your name at the top of the paper and note that a formal title page is not needed for this assignment. Please stick to early childhood ages. (Infant through...
-
The property, 7 Hume Street, Dartmouth, is a vacant lot which has been in existence since at least 1948. In 2009, the property was sold to Ms. Grant who, at that time, owned the adjacent property at...
-
A wheelchair ramp is 3 2 . 5 feet long and is 3 . 5 feet tall. Find the force required to puah a wheelchair and a person ( combinded weight 1 8 8 lbs ) up the ramp.
-
A group of friends, Adam, Patrick, Danica, Rodney and Stacy graduate from college together. After graduation, they are together at a party celebrating. Adam tells the group about his neighbor's house...
-
Job site clean up is a common area of dispute. Although it may seem minor, it is often a constant struggle that can have monetary impact. As a GC project manager, how can you make sure job site clean...
-
On Jan. 1, 2020, the Francis Co. provided the following information in relation to a defined benefit plan: Fair value of plan assets Projected benefit obligation Prepaid/Accrued Benefit Cost- Surplus...
-
Grace is training to be an airplane pilot and must complete five days of flying training in October with at least one day of rest between trainings. How many ways can Grace schedule her flying...
-
Sony Stereo began operations in March. March sales were $180,000 and purchases were $100,000. The beginning cash balance for April is $3,000. Sonys owner approaches the bank for an $80,000 loan to be...
-
Archer Foods is considering whether to overhaul an old freezer or replace it with a new freezer. Information about the two alternatives follows. Management requires a 10% rate of return on its...
-
SP 15 While reviewing the March 31, 2022, balance sheet of Business Solutions, Santana Rey notes that the business has built a large cash balance of $68,057. Its most recent bank money market...
-
A euro-area country that runs very large public deficits or shows a persistently high and rising debt-to-GDP ratio violates the provisions of a 2012 treaty aimed at promoting fiscal stability....
-
How does the time consistency problem apply to the conduct of monetary policy? How might long terms of office for central bankers help overcome it?
-
Consider the following data for Country A and Country B: Use these data to show that the ratio of public debt to GDP is expected to stabilize in Country A but not in Country B. How might this impact...
Study smarter with the SolutionInn App