er 8 Applicat X y! You have just been hired as a ne x C You Have Just Been Hired As AN X C You Have Just Been Hired As AN X + ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253%252F%252Fangelo.blackboard.com%252Fwebapps%252Fportal%252Ffram ter 8 Applications i Saved The company maintains a minimum cash balance of $67,000. 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 $67,000 in cash. eBook Required: Print Prepare a master budget for the three-month period ending June 30. Include the following detailed schedules: References 1. a. A sales budget, by month and in total. b. A schedule of expected cash collections, 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. Determine any borrowing that would be needed to maintain the minimum cash balance of $67,000. 3. A budgeted income statement for the three-month period ending June 30. Use the contribution approach. 4. A budgeted balance sheet as of June 30. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 1C Req 1D Req Req 3 Reg 4 Prepare a master budget for the three-month period ending June 30 that includes a schedule of expected cash collections, by month and in total. Earrings Unlimited Graw Applicatix y! You have just been hired as a ne x C You Have Just Been Hired As AN X C You Have Just Been Hired As AN X + mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fangelo.blackboard.com%252Fwebapps%252Fportal%25 Applications i Saved Monthly operating expenses for the company are given below: Variable: Sales commissions 4% of sales Fixed: Advertising $ 370, 000 Rent $ 35,000 Salaries $ 140, 000 Utilities $ 15, 500 Insurance $ 4 , 700 Depreciation 31, 000 rences Insurance is paid on an annual basis, in November of each year. The company plans to purchase $24,500 in new equipment during May and $57,000 in new equipment during June; both purchases will be for cash. The company declares dividends of $27,750 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 000'16 Accounts receivable ($47, 040 February sales; $555, 520 March sales) 602, 560 Inventory 155, 952 Prepaid insurance 29 , 500 Property and equipment (net) 1, 120, 000 Total assets $ 1, 999, 012 Liabilities and Stockholders' Equity Accounts payable $ 117, 090 Dividends payable 27 , 750 Common stock 1, 140, 000 Retained earnings 714, 262 Tatal Tinhilitian Mc Graw Prey. 1 of 1 Next > Type here to search O W Co DELL ESC F1 F2 F3 F4 F5 F6 F7 F8 F9 F10 F11 . F12 PrtScr K # A se K 2 3 4 5 6 7 9 Q W E R T Y U O P ock A S D F G H KBuilding Your Skills Case [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 Book below. Print 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 ferences months and budgeted sales for the next six months follow (in pairs of earrings): January (actual) 23, 400 June ( budget ) 53, 400 February (actual) 29, 400 July (budget) 33, 400 March (actual) 43, 400 August (budget ) 31, 400 April (budget ) 68, 400 September (budget) 28, 400 May (budget) 103 , 400 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 $5.70 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:Earrings Unlimited Cash Budget For the Three Months Ending June 30 April May June Quarter Beginning cash balance $ 91,000 $ 91,000 Add collections from customers 752,000 1,166,400 1,438,400 3,356,800 Total cash available 843,000 1, 166,400 1,438,400 3,447,800 Book Less cash disbursements: Print Merchandise purchases 0 erences Advertising 0 Rent Salaries Commissions Utilities Equipment purchases Dividends paid + O Total cash disbursements 0 0 0 Excess (deficiency) of cash available over disbursements 843,000 1, 166,400 1,438, 400 3,447,800 Financing: Borrowings 0 Repayments 0 Interest 0 Total financing 0 0 0 0 Ending cash balance $ 843,000 $ 1, 166,400 $ 1,438,400 $ 3,447,800Prepare a master budget for the three-month period ending June 30 that includes a budgeted income statement for the three- month period ending June 30. Use the contribution approach. Earrings Unlimited Budgeted Income Statement For the Three Months Ended June 30 Book Variable expenses: Print erences Fixed expenses 0 0