Problem $20-8$AA $($Algo$)$ Merchandising: Preparation of a complete master budget LO P$4$

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 $$30$ per unit and resold for $$57$ 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, $6,750$ 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, $$259,663$; February, $$727,118$; March, $$516,220.$

c$.$ Cash payments for merchandise purchases are budgeted as follows: January, $$65,000$; February, $$329,500$; March, $$133,200.$

d$.$ Sales commissions equal to $20\%$ of sales dollars are paid each month. Sales salaries $($excluding commissions$)$ are $$5,000$ per month.

e$.$ General and administrative salaries are $$11,000$ per month. Maintenance expense equals $$2,100$ per month and is paid in cash.

f$.$ New equipment purchases are budgeted as follows: January, $$36,000$; February, $$98,400$; and March, $$24,000.$ Budgeted depreciation expense is January, $ $6,250$; February, $$7,275$; and March, $$7,525.$

g$.$ The company budgets a land purchase at the end of March at a cost of $$165,000,$ 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 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:

Sales budget.

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.

Cash budgets.

Complete this question by entering your answers in the tabs below.

Cash budgets.

Note: Negative balances and Loan repayment amounts $($if any$)$ should be indicated with minus sign. Round your final answi to the nearest whole dollar. Answer is not complete.

Complete this question by entering your answers in the tabs below.

$\backslash (\backslash$square $\backslash )$ Required $3$

Required $4$

Required $7$

Required $8$

Budgeted income statement for the entire first quarter $($not for each month$).$

Note: Round your final answers to the nearest whole dollar.

$\backslash$begin$\{$tabular$\}\{|$c$|$c$|$c$|\}$

$\backslash$hline $\backslash$multicolumn$\{3\}\{|$l$|\}\{$DIMSDALE SPORTS COMPANY$\}\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{3\}\{|$l$|\}\{$Budgeted Income Statement$\}\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{3\}\{|$l$|\}\{$For Three Months Ended March $31\}\backslash \backslash$

$\backslash$hline Sales $\backslash (>\backslash )$ & & $\backslash \backslash$

$\backslash$hline Cost of goods sold & & $\backslash \backslash$

$\backslash$hline Gross profit & & $\backslash \backslash$

$\backslash$hline Selling, general and administrative expenses & & $\backslash \backslash$

$\backslash$hline Sales commissions expense & & $\backslash \backslash$

$\backslash$hline Sales salaries expense $\backslash (>\backslash )$ & & $\backslash \backslash$

$\backslash$hline General administrative salaries expense & & $\backslash \backslash$

$\backslash$hline Maintenance expense $\backslash (>\backslash )$ & & $\backslash \backslash$

$\backslash$hline Depreciation expense $\backslash (>\backslash )$ & & $\backslash \backslash$

$\backslash$hline Loan interest expense $\backslash (>\backslash )$ & & $\backslash \backslash$

$\backslash$hline Total operating expenses & & $0\backslash \backslash$

$\backslash$hline Income before income taxes $\backslash (>\backslash )$ & & $0\backslash \backslash$

$\backslash$hline Income taxes expense & & $\backslash \backslash$

$\backslash$hline Net income $\backslash (>\backslash )$ & $\backslash$$ & $0\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}$ Answer is not complete.

Complete this question by entering your answers in the tabs below.

Required $1$

Required $2$

Required $4$

Required $6$

Required $7$

Required $8$

Budgeted balance sheet as of March $31.$

Note: Round your final answers to the nearest whole dollar.

$\backslash$begin$\{$tabular$\}\{|$c$|$c$|$c$|\}$

$\backslash$hline $\backslash$multicolumn$\{3\}\{|$l$|\}\{$DIMSDALE SPORTS COMPANY$\}\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{3\}\{|$l$|\}\{$Budgeted Balance Sheet$\}\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{3\}\{|$l$|\}\{$March $31\}\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{3\}\{|$l$|\}\{$Assets$\}\backslash \backslash$

$\backslash$hline Cash $\backslash (>\backslash )$ & V & $\backslash \backslash$

$\backslash$hline Accounts receivable & & $\backslash \backslash$

$\backslash$hline Inventory $\backslash (>\backslash )$ & $\backslash (\backslash$checkmark $\backslash )$ & $\backslash \backslash$

$\backslash$hline Land & $\backslash (\backslash$checkmark $\backslash )$ & $\backslash \backslash$

$\backslash$hline Equipment $\backslash (>\backslash )$ & & $\backslash \backslash$

$\backslash$hline Less: Accumulated depreciation $>$ & $\backslash (\backslash$checkmark $\backslash )$ & $0\backslash \backslash$

$\backslash$hline Total assets & & $\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{3\}\{|$l$|\}\{$Liabilities and Equity$\}\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{3\}\{|$l$|\}\{$Liabilities$\}\backslash \backslash$

$\backslash$hline Accounts payable & $2$ & $\backslash \backslash$

$\backslash$hline Taxes payable & & $0\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{3\}\{|$l$|\}\{$Equity$\}\backslash \backslash$

$\backslash$hline Common stock & V & $\backslash \backslash$

$\backslash$hline Retained earnings $\backslash (>\backslash )$ & & $0\backslash \backslash$

$\backslash$hline Total Liabilities and Equity & & $\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}$