Problem 7-8AA Merchandising: Preparation of a complete master budget LO P4 IThe
ID: 2547276 • Letter: P
Question
Problem 7-8AA Merchandising: Preparation of a complete master budget LO P4 IThe following information applies to the questions displeyed below Neer the end of 015. the management of Dimsdale Sports Co. a merchandising company. prepared the following estimeted balance sheet for December 31, 2015. DIMSDALE SPORTS COMPANY Estimated Balance Sheet December 31, 2015 Assets Cash Accounts recelvable Inventory $ 36,000 525,000 150,000 711.000 Total current assets Equipment Less: accumulated depreciation $540,000 67,500 Equipment, net 472.500 Total assets $ 1183,500 Llablilitles and Equity $360000 15.000 90,000 Accounts payable Bank loan payable Toxes payable (due 3/15/2016) $ 465,000 Total liabilities Common stock Retained earnings 472,500 246,000 Total stockholders equity 718,500 Total llabilities and equity $ 1183,500Explanation / Answer
Per Chegg guidelines, 4 sub-parts have been answered.
1 DIMSDALE SPORTS CO. Sales Budget For January, Februrary, and March 2016 Budgeted Unit Sales Budgeted Unit Price Budgeted Total Dollars January 7000 55 385000 February 9000 55 495000 March 11000 55 605000 Totals for the quarter 27000 1485000 2 DIMSDALE SPORTS CO. Merchandise Purchases Budget January, Februrary, and March 2016 January February March Next month's budgeted sales (units) 9000 11000 10000 Ratio of inventory to future sales 20% 20% 20% Desired ending inventory 1800 2200 2000 Budgeted sales units 7000 9000 11000 Required units of available merchandise 8800 11200 13000 Less beginning inventory 5000 1800 2200 Units to be purchased 3800 9400 10800 Purchase price per unit $ 30 30 30 Total budgeted merchandise purchases $ 114000 282000 324000 3 DIMSDALE SPORTS CO. Selling Expense Budget January, Februrary, and March 2016 January February March Budgeted sales $ 385000 495000 605000 Sales commission as percent of sales 20% 20% 20% Sales commissions $ 77000 99000 121000 Sales salaries 60000 60000 60000 Total budgeted selling expense $ 137000 159000 181000 4 January February March Equipment - beginning of month 540000 576000 672000 Equipment purchases 36000 96000 28800 Equipment - end of month 576000 672000 700800 Depreciation expense 6000 7000 7300 DIMSDALE SPORTS CO. General and Administrative Expense Budget January, Februrary, and March 2016 January February March General and administrative salaries 12000 12000 12000 Maintenance expense 2000 2000 2000 Depreciation expense 6000 7000 7300 Total budgeted general and administrative expense $ 20000 21000 21300