***ALL I NEED HELP WITH IS HOW TO FIND THE BEGINNING CASH BALANCE FOR MAY AND JUNE PLEASEEEEEE*****

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-$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): 51,200 31,200 29,200 26,200 January (actual) February (actual) March (actual) April (budget) May (budget) 21,200 27,200 June (budget) July (budget) August (budget) September (budget) 41,200 66,200 101,200 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: 4% of sales Sales commissions Fixed: $ 260,000 $ 24,000 $ 118,000 $ 10,000 $ 3,600 $ 20,000 Advertising Rent Salaries Utilities Insurance Depreciation Insurance is paid on an annual basis, in November of each year. The company plans to purchase $19,000 in new equipment during May and $46,000 in new equipment during June; both purchases will be for cash. The company declares dividends of $19,500 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 80,000 Accounts receivable ($43,520 February sales; $527,360 March sales) Inventory 570,880 121,808 24,000 1,010,000 Prepaid insurance Property and equipment (net) $ 1,806,688 Total assets Liabilities and Stockholders' Equity Accounts payable Dividends payable 106,000 19,500 920,000 761,188 Common stock Retained earnings $ 1,806,688 Total liabilities and stockholders' equity The company maintains a minimum cash balance of $56,000. 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 $56,000 in cash. Earrings Unlimited Cash Budget For the Three Months Ending June 30 April May Quarter June $ 80,000 $ 80,000 Beginning cash balance $ 56,472 $ 320,684 Add collections from customers Total cash available 716,800 1,131,200 1,403,200 3,251,200 796,800 1,187,672 1,723,884 3,331,200 Less cash disbursements: Merchandise purchases 371,220 947,800 290,460 286,120 Advertising 260,000 260,000 260,000 780,000 Rent 24,000 24,000 24,000 72,000 Salaries 118,000 118,000 118,000 354,000 Commissions 42,368 64,768 32,768 139,904 Utilities 10,000 30,000 10,000 10,000 Equipment purchases 46,000 65,000 19,000 Dividends paid 19,500 19,500 Total cash disbursements Excess (deficiency) of cash available over disbursements 764,328 866,988 776,888 2,408,204 946,996 922,996 32,472 320,684 Financing: 24,000 Borrowings 24,000 Repayments (24,000) (24,000) (720) Interest (720) Total financing (24,720) (720) $ 922,276 24,000 $ 56,472 $ 320,684 $ 922,276 Ending cash balance