Ariel's Melodies Limited is in the process of preparing the budget for the second quarter of $2024$& has come

to you for assistance. The manager, Eric, has provided you with the following information:

Budgeted sales for the next $3$ months are:

The selling price is $$50/$ unit & the company expects $20\%$ of sales to be cash. The credit sales are expected

to be collected $70\%$ in the month of sale &$30\%$ in the following month.

The company plans to make the following purchases of inventory during the upcoming quarter:

The company pays for $40\%$ of inventory purchases in the month of purchase & the remaining $60\%$ is

paid in the following month.

Ending inventory values are expected to be $$12,000$ at April $30$;$$8,000$ at May $31$&$$10,000$ at June $30.$

Selling & administrative expenses for the next $3$ month including depreciation are expected to be:

Depreciation per month

$$2,000$

The company plans to pay dividends of $$10,000$ in June.

In May the company has plans to purchase equipment at a cost of $$26,000$ cash.

Ariel's Melodies Limited maintains a minimum cash balance of $$20,000$ at the end of each month.

Balances expected on the March $31,2024$ balance sheet are as follows:

The company has an agreement with a local bank that will allow them to borrow up to

$$100,000$ on a line of credit $($note payable$).$ The interest rate is $12\%.$ All borrowing is done

at the beginning of the month & repayments are made at the end of the month when cash is

available. Interest on loans will be paid at the same time as the loan is repaid.

The note payable at March $31$ will be repaid in April if there is cash available. The loan was

advanced on March $1,2024$

round all interest calculations to the nearest dollar.

REQUIRED:

Prepare a sales & cash collections budget for the second quarter of $2024.$

Prepare a schedule of cash disbursements from purchases for the second quarter of $2024.$

Prepare a cash budget for the second quarter of $2024.$

Prepare a budgeted income statement for the quarter ended June $30,2024.$

Prepare a budgeted income statement as of June $30,2024.$