Please provide me with the correct solution to the areas marked in red and the a
ID: 2537253 • Letter: P
Question
Please provide me with the correct solution to the areas marked in red and the areas marked in geeen missing information. Near the end of 2017, the managoment of Dimsdale Spots Co, a merchandising company, prepared the following estimalod balance sheet for December 31, 2017 DINSDALE SPORTs Estinated Balance Sheet 017 5 35, 500 Cashsset Accounts receivable Inventory Total current assets 520, 000 105, 000 648,000 660,500 ess: accumalated depreciation 81,000 Equipment,net Total assets 567,000 $1,227,500 Liabilities and Eqaity $375, 000 Accounts payable Bank loan payable Taxes payable (due 3/15/2018) Total 1iabilieies 13,000 8,000 476,000 stock 473,00 278, 500 Retained earnings Total stockholders equity Total liabilieles and equity 751 500 1,227, 500 To prepare a master budget for January, February, and March of 2018, management gethers the following information octed r ventory level of 5,250 The company's sngle produd unts on December 31, 2017,ts more than managements desred level, which is 20% orthe next month's expected sales (in unts) Expected sales are. January, 7,250 units, February, 8,750 units, March, 11,250 units, and Apeil, 9500 unts purchased for $2.0 per unit and resold for $60 per unt The b. Cash sales and aedt sales represent 25% and 75%, respect vely of total sales ofthe credt sales, 57% ts collected in the first c. Merchandise purchases-e pad lor asblm 20% r the fri moth aner the month of purchase ad 80% nte second month month after the month of sale and 49% nte second month after the month of sale For me December 31, 2017,accounts receivable belance, $125000 is collected in January and the remaining $395,000 is collected in February afer the month of purchase For the December 31, 2017, accounts payable balance, $80,000 is paid in January and the remaining $315,000 is paid in February d. Sales commessons equal to 20% of sales are paid each month Sales salanes (excludrg commissions) are S84.000 per year e. General and administrative salaries are $144,000 per year. Maintenance expense equals $1,900 per month and is paid in cash t Equipment reported in the December 31, 2017, balance sheet was purchased in January 2017 It is being depreciated over eight years under the straight-line method with no salvage value. The folowing amounts for new equipment purchases are planned in the coming qarter January. $33.600. February, $100,000, and March $28,800 This equpment w straight-line method over eight years with no salvage value A full month's depreciation is taken for the month in which equipment be deprecated under the g. The company plans to buy land at the end of March at a cost of $165,000, which willbe paid with cash on the last day of the h. The company has a workrg anangomont with its bank to otan addtional bans as needed The nterest rate s12% per year month and interest is paid at each month-end based on the beginning balance Partisl or full payments on these loans can be made on The income tax tate forthe company is 43% income taxes on the first quarter's income will not be pad urea Apra 15 the last day of the month. The company has agreed to maintain a minimum ending cash balance of $50,000 at the end of each month L Required Prepare a master budget for each of the first three months of 2018, include the following component budgets 1 Monthly sales budgets 2 Monthly merchandise purchases budgets 3. Monthly selling expense budgets 4. Monthly goneral and administrative expense budgets 5. Monthly capital expenditures budoet .Monthly cash budgets 7. Budgeted income statement for the ente ist quarter (not for each month) Budgeted balance shoet as of March 31, 2018 mplete this question by "ntg yw answers in the tabs blow.Explanation / Answer
Answer a Sales Budget Jan Feb Mar Total Sales in Units 7,250 8,750 11,250 27,250 Sp Per Unit 60 60 60 60 Total Sales in $ 435,000 525,000 675,000 1,635,000 Cash Sales - 25% of Sales 108,750 131,250 168,750 408,750 Credit Sales - 75% of Sales 326,250 393,750 506,250 1,226,250 Answer b Schedule of Expected Cash Collections from Sales Jan Feb Mar Total Cash Sales 108,750 131,250 168,750 408,750 Collection from Accounts Receivables Accounts Receivable - Beg. Balance 125,000 395,000 520,000 Jan Sales - 185,962 140,288 326,250 Feb. Sales - - 224,438 224,438 Mar. Sales - - - - Total cash Collections 233,750 712,212 533,476 1,479,438 Answer c Merchandise Purchase Budget Jan Feb Mar Total Sales In units 7,250 8,750 11,250 27,250 Add: Closing Inventory in units 1,750 2,250 1,900 2,000 Total Needs 9,000 11,000 13,150 29,250 Less: opening Inventory in uints -5,250 -1,750 -2,250 -5,250 Required Purchases in Units 3,750 9,250 10,900 24,000 Price per Unit 20 20 20 20 Total Purchases in $ 75,000 185,000 218,000 478,000 Answer d Schedule of Cash payments to Suppliers Jan Feb Mar Total Cash Payment Accounts Payable - Beginning 60,000 315,000 - 375,000 Jan Purchases - 15,000 60,000 75,000 Feb Purchases - - 37,000 37,000 Mar Purchases - Total Cash Payment to Suppliers 60,000 330,000 97,000 487,000 Answer e Selling & Admn. Budget Jan Feb Mar Total Sales Comm. - 20% of Sales 87,000 105,000 135,000 327,000 Fixed Sales Salaries 7,000 7,000 7,000 21,000 General & Admn. Salaries 12,000 12,000 12,000 36,000 Maint. Exp. 1,900 1,900 1,900 5,700 Dep. 7,100 8,150 8,450 23,700 Total 115,000 134,050 164,350 413,400 Calculation of Dep. Exp. Jan Feb Mar Total Equipment in the Beginning 6,750 6,750 6,750 20,250 Purch in Jan. 350 350 350 1,050 Purch in Feb 1,050 1,050 2,100 Purch in Mar 300 300 Total Dep. 7,100 8,150 8,450 23,700 Schedule of Cash payments of Selling & Admn. Budget Jan Feb Mar Total Sales Comm. - 20% of Sales 87,000 105,000 135,000 327,000 Fixed Sales Salaries 7,000 7,000 7,000 21,000 General & Admn. Salaries 12,000 12,000 12,000 36,000 Maint. Exp. 1,900 1,900 1,900 5,700 Total 107,900 125,900 155,900 389,700 Monthly Capital Expenditure Budget Jan Feb Mar Total Equipment Purchased 33,600 100,800 28,800 163,200 Land Purchased - - 165,000 165,000 Total Capital Expenditure 33,600 100,800 193,800 328,200 Cash budget Jan Feb Mar Total Opening cash Balance 35,500 54,620 210,132 35,500 Add: receipts Collection from Customers 233,750 712,212 533,476 1,479,438 Total Cash available 269,250 766,832 743,608 1,514,938 Less: Disbursements Cash Disbursement - Accounts Payable 60,000 330,000 97,000 487,000 Selling & Admn. Exp. 107,900 125,900 155,900 389,700 Purchase of Equipment 33,600 100,800 28,800 163,200 Purchase of Land - - 165,000 165,000 Income Tax Paid 88,000 88,000 Total Disbursement 201,500 556,700 534,700 1,292,900 Cash Balance Closing 67,750 210,132 208,908 222,038 Add: Finance from Bank - - Less: Payment to Bank -13,000 - - -13,000 Less: Payment of interet - Bank loan -130 - - -130 Net Cash Balance Closing 54,620 210,132 208,908 208,908 Income Statement For the Qtr Ending Mar-31, 2018 Sales 1,635,000 Less: Variable Cost Cost of Goods Sold 545,000 Sales Comm. - 20% of Sales 327,000 872,000 Contribution 763,000 Less: Fixed Cost Sales Salaries 21,000 General & Admn. Salaries 36,000 Maint. Exp. 5,700 Dep. 23,700 86,400 Operating Profit 676,600 Less: Interest Expenses 130 Net Income 676,470 Less: Income Tax - 43% 290,882 Net Income After Tax 385,588 Balance Sheet As on Mar 31 Assets Current Assets Cash 208,908 Accounts receivables 675,563 Inventory 38,000 922,470 Fixed Assets Equipment 648,000 Add: Addition during the Qtr. 163,200 Less: Dep. -104,700 706,500 Land 165,000 Total Assets 1,793,970 Liabilities Accounts Payable 366,000 Income Tax Payable 290,882 Total liabilities 656,882 Shareholders's Equity Common Stock 473,000 Retained Earnings 664,088 Total Stockholders equity 1,137,088 Total liabilities & Stockholders' Equity 1,793,970 - Schedule of Retained Earnings Opening Balance 278,500 Add: net income 385,588 Less: Dividend declared - Closing Balance 664,088
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