FASHION JEWELS INC. You have been hired as a new management accountant by Fashion Jewels, a distributor of jewelries 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 experience a shortage of cash. Since you are well trained in budgeting, you have decided to prepare comprehensive budgets for the upcoming second quarter in order to show management the benefits that can be gained from an integrated budgeting program. To this end, you have worked with accounting department and other areas of finance division to gather the information assembled below. The company sells many styles of jewelries, but all are sold for the same price, $10.00 per set. Actual sales of jewelries for the last three months and budgeted sales for the next six months follow (in sets of jewelries): 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 jewelries sold in the following month. Suppliers are paid $4.00 for a set of jewelries. One-half of a month's purchases in paid for in the month of the purchase; the other half is paid for in the following month. All sales are on credit, with no discount, and payable within 15 days. The company has found, however, that 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% in the second month following sale. Bad debts have been negligible. Monthly operation expenses for the company are given below: Insurance is paid on an annual basis, in November of each year. The company plans to purchase 16,000 in new equipment during May and $40,000 in new equipment during June; both purchases will be for cash. The company declares dividends of $15,000 each quarter payable in the first month of the following quarter. A listing of the company's ledger accounts as of March 31 is given below: The company maintains a minimum cash balance of 50,000. All borrowing is done at the beginning of a month, and repayments are made at the end of a month. The annual interest rate is 12%. Interest is computed and paid at the end of each quarter on all loans outstanding during the quarter. 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 purchaser 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 the month and in total. Determine any borrowing that would be needed to maintain the minimum cash balance of $50,000 3.A budgeted income statement for the three months period ending June 30. Use the contribution approach. 4.A budgeted balance sheet as of June 30.