CHECK FIGURE (2) (3) June ending cash balance: $10,730; Net income: $151,880 You have just been hired as a management trainee by Cravat Sales Company, a nationwide distributor ofa designer's silk ties. The company has an exclusive franchise on the distribution of the ties, and sales have grown so rapidly over the last few years that it has become necessary to add new members to the management team. You have been given responsibility for all planning and budgeting. Your first assignment is to prepare a master budget for the next three months, starting April 1. You are anxious to make a favourable impression on the president and have assembled the information below. The company desires a minimum ending cash balance each month of $10,000. The ties are sold to retailers for $8 each. Recent and forecasted sales in units are as follows:January (actual) February (actual) March (actual) April May June July August September 20,000 24,000 28,000 35,000 45,000 60,000 40,000 36,000 32,000 The large buildup in sales before and during June is due to Father's Day. Ending inventories are supposed to equal 90% of the next month's sales in units. The ties cost the company $5 each. Purchases are paid for as follows: 50% in the month of purchase and the remaining S0% in the following month. All sales are on credit, with no discount, and payable within 15 days. The company has found, however, that only 25% of a month's sales are collected by month-end. An additional 50% are collected in the following month, and the remaining 25% are collected in the second month following sale. Bad debts have been negligible.The company's monthly selling and administrative expenses are given below: Variable: Sales commissions Fixed: Wages and salaries Utilities Insurance Depreciation Miscellaneous A $1 per tie $22,000 $14,000 $1,200 $1,500 $3,000 All selling and administrative expenses are paid during the month, in cash, with the exception of depreciation and insurance expired. Land will be purchased during May for $25,000 cash. The company declares dividends of$12,000 each quarter, payable in the first month of the following quarter. The company's balance sheet at March 31 is given below:Cash Accounts receivable ($48,000 February sales, $168,000 March sales) Inventory (31,500 units) Prepaid insurance Fixed assets, net of depreciation Total assets Accounts payable Dividends payable Common shares Retained earnings Assets Total liabilities and shareholders' equity Liabilities and Shareholders' Equity $ 14,000 216,000 157,500 14,400 172,700 $574600 $ 85,750 12,000 300,000 176 850 $574600The company has an agreement with a bank that alows it to borrow in increments of $ 1,000 at the beginning of each month, up to a total loan balance ofS140,000. 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 S1,000), while still retaining at least $10,000 in cash. Required: Prepare a master budget for the three-month period ending June 30. Include the following detailed budgets: 1. a. A sales budget by month and in total. b. A schedule of expected cash collections from sales, by month and in total. c. A merchandise purchases budget in units and in dollars. Show the budget by month and in total. d. A schedule of expected cash disbursements for merchandise purchases, by month and in total. 2. A cash budget. Show the budget by month and in total.. calculate financing including borrowing, repayment and interest using formula for cash budget