3 Case 8-33 (Algo) Master Budget with Supporting Schedules [LO8-2, LO8-4, LO8-8, LO8-9, LO8-10] You have just been hired as a new management trainee by Earrings Unlimited, a distributor of earrings to various retail outlets located in shopping malls across the country. In the past, the company has done very little in the way of budgeting and at certain times of the year has experienced a shortage of cash. Since you are well trained in budgeting, you have decided to prepare a master budget for the upcoming second quarter. To this end, you have worked with accounting and other areas to gather the information assembled below The company sells many styles of earrings, but all are sold for the same price-519 per pair. Actual sales of earrings for the last three months and budgeted sales for the next six months follow (in pairs of earrings) es January (actual) February (actual) March (actual) April (budget) May (budget) 24,000 June (hudget) 30,000 July (budget) 44,000 August (budget) 69,000 September (budget) 304,000 54,000 34.000 32,000 29,000 The concentration of sales before and during May is due to Mother's Day. Sufficient inventory should be on hand at the end of each month to supply 40% of the earrings sold in the following month Suppliers are paid $6.00 for a pair of earrings. One-half of a month's purchases is paid for in the month of purchase the other half is paid for in the following month. All sales are on credit. Only 20% of a month's sales are collected in the month of sale. An additional 70% is collected in the following month and the remaining 10% is collected in the second month following sale. Bad debts have been negligible