Near the end of 2013, the management of Dimsdale Sports Co, a merchandising comp

Question

Near the end of 2013, the management of Dimsdale Sports Co, a merchandising company, prepared the following estimated belance sheet for December 31, 2013. Estimated Balance Sheet 31, Assets Cash Accounts receivable $ 35,500 520,000 95,000 Total current assets 650,500 $ 537,000 67,125 Less accumulated depreciation Equipment, net 469,875 Total assets $ 1,120,375 Liabilities and Equity Accounts payable Bank loan payable Taxes payable (due 3/15/2014) 375,000 5,000 92,000 $ 482.000 Total liabilities Common stock Retained earnings 470,500 67,875 Total stockholders equity 638.375 Total liabilities and equity $ 1,120,375 To prepare a master budget for Januáry. February, and March of 2014, management gathers the tollowing e. Dimsdale Sports' single product is purchased for $20 per unit and resold for $53 per unit. The expected inventory level of 4,750 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 arr Jinuary 7500 units February 8.700 units; March. 11,000 unts, and Aril soo unts. b. Cash sales and credit sales represent 30% and 70%, respectively, of total sales. Of the credit sales, 6n is collected in the first month after the month of sale and 39% in the second month after the month of For the December 31, 2013, accounts recevable balance $125.000 is collected in Janunry and sale SC

Explanation / Answer

Purchase Budget

Payment to creditors

Sales Budget

Receipt from debtors

Cash Budget

Jan Feb Mar Sales 7500 8700 11000 +Closing Stock 1740 2200 2100 - Opening Stock -4750 -1740 -2200 Purchase units 4490 9160 10900 Purchase $ 89800 183200 218000

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