The following information applies to the questions displayed below. Near the end

Question

The following information applies to the questions displayed below. Near the end of 2013, the management of Dimsdale Sports Co, a merchandising company, prepared the following estimated balance sheet for December 31, 2013. Estimated Balance Sheet December 31, 2013 Assets Cash Accounts receivable s 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 Lisbilities end Equity Accounts payable Bank loan payable Taxes peyable (due 3/15/2014) $ 375,000 15,000 92,000 $ 482.000 Total liabilities Common stock Retained earnings 470,500 67,875 Total stockholders equity Total sabilities and equity S 1,120,375 To prepare a master budget for January February, and March of 2014, management gnthers the tolowing a. Dimsdale Sports single product is purchased for $20 per unit and resold for $53 per unit. The evel for 2014, which is 20% of the next month's expected saies lin units) Expected sales are. January rrvernory evel of 4750 .nts on December 31, 20t3 is 'nore man management's deseed 7.500 unts Febuary, B

Explanation / Answer

selling expense budget

JAN FEB MAR Sales   (A) 397500      [7500*53] 461100   [8700*53] 583000    [11000*53] % of sales commission   (B) 20% OR .20 20% or .20 20% or .20 sales commission (A*B) 79500 92220 116600 sales salaries 84000 84000 84000 Total selling expense 163500 176220 200600

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