Homework: Strategic Tools Assignment i Saved Help Save & Exit Submit 5 Check my work 2 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 15 merchandisers points 5. Capital expenditures budgets. 6. Cash budgets. 7. Budgeted income statement for entire quarter (not monthly) ended March 31. eBook 8. Budgeted balance sheet as of March 31. Print References Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 Merchandise purchases budgets. DIMSDALE SPORTS Merchandise Purchases Budget January February March Budgeted sales units 7,000 9,500 10,75 Calculation of Desired ending inventory Next period budgeted sales units 9,500 10,750 9,00 Ratio of inventory to future sales 20% 20% 20% Add: Desired ending inventory 1.900 2, 150 1,800 Total required units Less: Beginning inventory units Units to be purchased Cost per unit Cost of merchandise purchases Homework: Strategic Tools Assignment 0 Saved Help 15 points eBook Print Refere nces MC Graw Hill Dimsdale Sports, a merchandising company, reports the following balance sheet at December 31. DIMSDALE SPORTS COMPANY Balance Sheet December 31 Assets Cash $ 21,599 Accounts receivable 526,666 Inventory 95,666 Equipment 3 576,666 Less: Accumulated depreciation 72,666 Equipment, net 564,666 Total assets $ 1,146,566 Liabilities and Equity Liabilities Accounts payable 3 375,666 Loan payable 12,666 Taxes payable (due March 15) 96,666 $ 477,666 Equity Common stock 3 474,566 Retained earnings 139,666 Total stockholders' equity 663,566 Total liabilities and equity 3?: 1,146,566 To prepare a master budget for January, FebruaIy, 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, 7,000 units; February, 9,500 units; March, 10,750 units; and April, 9,000 units. All sales are on credit. b. Cash receipts from sales are budgeted as follows: January, $269,650; February, $742,916; March, $532,167 c. Cash payments for merchandise purchases are budgeted as follows: January, $70,000; February, $321,600; March, $105,400. d. Sales commissions equal to 20% of sales dollars are paid each month. Sales salaries (excluding commissions) are $5,500 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, $36, 000; February, $98 400; and March, $28, 800 Budgeted depreciation expense is January, $ 6, 375; February, $7,400, and March, $77.00 9. The company budgets a land purchase at the end of March at a cost of $150,000, 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 37%. Income taxes on the rst 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. Save & Exit Submit Check my work 5