a team of consultants who assist organizations with budgeting, and you provide data analysis to assist with decision making. You have just been hired as a consultant 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. The organization is also interested in changing the commission structure to see if they can boost profits. 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$16 per pair. Actual sales of earrings for the last three months and budgeted sales for the next six months follow (in pairs of earrings):

January (actual)	22,200	June (budget)	52,200
February (actual)	26,200	July (budget)	29.200
March (actual)	40,200	August (budget)	20,200
April (budget)	62,200	September (budget)	24,200
May (budget)	100,200

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 $4.60 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.

Monthly operating expenses for the company are given below:

Variable:
Sales commissions		4	% of sales
Fixed:
Advertising	$	230,000
Rent	$	21,000
Salaries	$	112,000
Utilities	$	8,500
Insurance	$	3,300
Depreciation	$	17,000

Insurance is paid on an annual basis, in November of each year.

The company plans to purchase $20,500 in new equipment during May and $45,000 in new equipment during June; both purchases will be for cash and the new purchases are not depreciated this quarter, but all other depreciation remains because nothing was sold. The company declares dividends of $18,000 each quarter, payable in the first month of the following quarter.

The company's balance sheet as of March 31 is given below:

ASSETS
Cash	$	70,000
AAccounts receivable ($41,920 February sales plus $514,560 March sales)		556,480
Inventory		114,448
Prepaid insurance		29,000
Property and equipment (book value net of Acc. Depr))		1,110,000
Total assets	$	1,879,928
LIABILITES AND STOCKHOLDERS' EQUITY
Accounts payable	$	112,700
Dividends payable		18,000
Common stock		1,150,000
Retained earnings		599,228
Total liabilities and stockholders' equity	$	1,879,928

The company maintains a minimum cash balance of $62,000. All borrowing is done at the beginning of a month; any repayments are made at the end of a month.

The company has an agreement with a bank that allows the company to borrow in increments of $1,000 at the beginning of each month. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. At the end of the quarter, the company would pay the bank all of the accumulated interest on the loan and as much of the loan as possible (in increments of $1,000), while still retaining at least $62,000 in cash.

Required Deliverables:

- budgeted income statement for the three-month period ending June 30. Use the contribution approach.

- budgeted balance sheet as of June 30.

Please complete on excel and screenshot.