please type answer where it is suppose to be! thanks Near the end of 2017, the m
ID: 2553621 • Letter: P
Question
please type answer where it is suppose to be! thanks
Near the end of 2017, the management of Dimsdale Sports Co., a merchandising company. prepared the following estimated balance sheet for December 31, 2017 DINSDALE SPORTS COMPANY Estinated Balance Sheet Decenber 31, 2817 Assets $ 36,588 528,800 Accounts receivable Total current assets Less: accunulated depreciation $ 699,808 588,988 Equipment, net Total assets 514,500 $1,213,58e Liabilities and Equity payable $375,888 16,900 Bank loan payable Taxes payable (due 3/15/2818) Total 1iabilities Conmon stock $ 483,8e8 475,800 255,500 Total stockholders equity Total liabilities and equity 730,500e $1,213,58e To prepare a master budget for January, February, and March of 2018, management gathers the following Information. a. The company's single product is purchased for $30 per unlt and resold for $56 per unit. The expected Inventory level of 4750 unlts b. Cash sales and credit sales repreGent 20% and 80%, respectively, of total sales. Of the credit sales, 61% Is collected in the first on December 31, 2017, is more than management's desired level, which is 20% of the next month's expected sales (in units). Expected sales are: January, 6,750 units, February, 9,250 unlts: March, 11,500 units; and Aprl, 10,500 units. month after the month of sale and 39% in the second month after the month of sale. For the December 31, 2017, accounts recevable balance, $125,000 Is collected In January and the remalning $395,000 Is collected In February. c. Merchandise purchases are paid for as follows: 20% in the first month after the month of purchase and 80% in the second month after the month of purchase. For the December 31, 2017, accounts payable balance, $85,000 is pald In January and the remalning d. Sales commissions equal to 20% of sales are paid each month. Sales salaries (excluding commissions) are $90,000 per year. e. General and administrative salarles are $132,000 per year. Malntenance expense equals $1,900 per month and Is pald In cash. f. Equlpment reported In the December 31, 2017, balance sheet was purchased In January 2017. It Is belng depreclated over elght years under the stralght-ine method with no salvage value. The followlng amounts for new equipment purchases are planned In the coming quarter: January. $38,400: February. $98.400: and March, $24.000. This equlpment will be depreclated under the stralght- line method over elght years with no salvage value. A full month's depreclation is taken for the month In which equlpment Is g. The company plans to buy land at the end of March at a cost of $140.000, which will be pald with cash on the last day of the month. h. The company has a working arrangement with its bank to obtain additional loans as needed. The interest rate is 12% per year, and Interest is pald at each month-end based on the beginning balance. Partial or full payments on these loans can be made on the last day of the month. The company has agreed to malntaln a minlmum ending cash balance of $2000 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.Explanation / Answer
Dimsdale Company
Cash Budget
January, February, March 2018
Dimsdale Sports Co.
Budgeted Income Statement
For the three months ended March 31, 2018
Dimsdale Sport Co.
Balance Sheet
March 31, 2018
January February March Beginning Cash Balance $ 36,500 2,000 149,099 Cash Receipts from Customers 200,600 683,064 499,520 Total Cash Available 237,100 685,064 648,619 Cash Payments for Merchandise 85,000 313,100 150,600 Purchase of Land 0 0 140,000 Purchase of Equipment 38,400 98,400 24,000 General and Administrative Salaries 11,000 11,000 11,000 Maintenance Expense 1,900 1,900 1,900 Sales Commission 75,600 103,600 128,800 Sales Salaries 7,500 7,500 7,500 Interest on Bank Loan 160 5 0 Taxes Payable 0 0 92,000 Total Cash Payments 219,560 535,505 555,800 Preliminary Cash Balance 17,540 149,559 92,819 Borrowing ( Repayment) ( 15,540) (460) 0 Ending Cash Balance 2,000 149,099 92,819Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.