Near the end of 2013, the management of Dimsdale Sports Co., a merchand sing com
ID: 2466782 • Letter: N
Question
Near the end of 2013, the management of Dimsdale Sports Co., a merchand sing company, prepared the following estimated balance sheet for December 31, 2013 DIMSDALE SPORTS COMPANY Estimated Balance Sheet December 31, 2013 Assets Cash $ 36,500o Total current assets $ 538.000 691500 67,250 Equipment, net 470,750 Total assets $ 1162,250 Liabilities and Equity Accounts payable Bank loan payable Taxes payable (due 3/15/2014) $ 350,000 6,000 90,000 $ 456,000 Total llabilities Common stock Retained earnings 473,500 232,750 Total stockholders' equity 706,250 Total labilities and equity $ 1162,250 To prepare a master budget for January. February, and March of 2014, management gathers the fo owing a. Dimsdale Sports single product is purchased for $30 per unit and resoid for $55 per unit. The expected nventory level of 4,500 units on December 31, 2013, is more than management's desired level for 2014, which is 20% of the next month's expected sales (in units). Expected sales are: January, 6,500 units February, 8,500 unts, March, 11,000 units; and April, 10,000 units. b-Cash sales and credit sales represent 30% and 70%, respectively, of total sales. Of the credit sales, 57% is collected in the first month after the month of sale and 43% in the second month after the month of sale. For the December 31, 2013, accounts receivable balance, $130,000 is collected in January and the remaining $390,000 is collected in February.Explanation / Answer
Monthly General and administrative expense budgets
January
February
March
Equipment- Beginning of Month
$ 538,000
$ 572,000
$ 669,000
Equipment purchases
$ 34,000
$ 97,000
$ 30,000
Equipment -end of month
$ 572,000
$ 669,000
$ 699,000
DIMSDALE SPORTS CO.
General and administrative expense budget
January, February and March 2014
January
February
March
Salaries Expense ($144000/12 Months)
$ 12,000
$ 12,000
$ 12,000
Maintenance Expense
$ 2,000
$ 2,000
$ 2,000
Total
$ 14,000
$ 14,000
$ 14,000
Monthly General and administrative expense budgets
January
February
March
Equipment- Beginning of Month
$ 538,000
$ 572,000
$ 669,000
Equipment purchases
$ 34,000
$ 97,000
$ 30,000
Equipment -end of month
$ 572,000
$ 669,000
$ 699,000
DIMSDALE SPORTS CO.
General and administrative expense budget
January, February and March 2014
January
February
March
Salaries Expense ($144000/12 Months)
$ 12,000
$ 12,000
$ 12,000
Maintenance Expense
$ 2,000
$ 2,000
$ 2,000
Total
$ 14,000
$ 14,000
$ 14,000
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