I have done some of the work but a few parts are incorrect.

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$13 per pair. Actual sales of earrings for the last three months and budgeted sales for the next six months follow (in pairs of earrings): January (actual) 20,600 June (budget) 50,600 February (actual) 26,600 July (budget) 30,600 March (actual) August 40,600 (budget) 28,600 April September (budget) 65,600 (budget) 25,600 May (budget) 100,600 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 $4.30 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: sales Variable: Sales commissions Fixed: Advertising Rent Salaries Utilities Insurance Depreciation $230,000 $ 21,000 $112,000 $ 8,500 $ 3,300 $ 17,000 Insurance is paid on an annual basis, in November of each year. The company plans to purchase $17,500 in new equipment during May and $43,000 in new equipment during June: both purchases will be for cash. The company declares dividends of $17.250 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 $ 77,000 Accounts receivable ($34,580 February sales; $422,240 March sales) 456,820 Inventory 112,832 Prepaid insurance 22,500 Property and equipment (net) 990,000 Total asseto $1,649, 152 Liabilities and Stockholders' Equity Accounts payable $ 103,000 Dividenda payable 17,250 Common stock 860,000 Retained earnings 668,902 Total liabilities and $1,649,152 stockholders' equity The company maintains a minimum cash balance of $53,000. 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 $53,000 in cash. Required: Prepare a master budget for the three-month period ending June 30. Include the following detailed schedules: 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 $53,000. 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. Reg 1A Reg 1B Req 1C Reg 1D Reg 2 Req3 Req4 Prepare a master budget for the three-month period ending June 30 that includes a sales budget, by month and in total. Sales Budget April May June Quarter Budgeted unit sales 65,600 100,600 50,600 216,800 Selling price per unit $ 13 S 13 S 13 $ 13 $ 13 $ S Total sales S $ 852,800 1,307,800 657,800 2,818,400 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 Schedule of Expected Cash Collections April May June Quarter February sales $ 34,580 0 0 S 34,580 March sales 369,460 52,780 0 422,240 April sales 170,5601 596,960 85,280 852,800 May sales of 261,560 915,460 1,177,020 June sales 0 0 131,560 131,560 Total cash S S $ 574,600 $ 911,300 collections 1,132,300 2,618,200 Prepare a master budget for the three-month period ending June 30 that includes a merchandise purchases budget in units and in dollars. Show the budget by month and in total. (Round unit cost to 2 decimal places.) Show less Earrings Unlimited Merchandise Purchases Budget April May June Quarter Budgeted unit sales 65,600 100,600 50,600 216,800 Add: Desired ending merchandise 40,240 20,240 12.240 72,720 inventory Total needs 105,840 120,840 62,840 289,520 Less: Beginning merchandise 26,240 40,240 20,240 86,720 inventory Required purchases 79,600 80,600 42,600 202,800 Unit cost $ 4.30 S 4.30 $ 4.30 S 4.30 $ S $ S Required dollar purchases 342,280 346,580 183,180 872,040 Prepare a master budget for the three-month period ending June 30 that includes a schedule of expected cash disbursements for merchandise purchases, by month and in total. Show less Earrings Unlimited Budgeted Cash Disbursements for Merchandise Purchases April May June Quarter Accounts $ S payable 103,000 103.000 April purchases 171,140 171,140 342.280 May purchases 173,290 173,290 346,580 June purchases 91,590 91,590 Total cash $ $ $ payments 274,140 344.430 264,880 883,450 Prepare a master budget for the three-month period ending June 30 that includes 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 $53,000. (Cash deficiency, repayments and interest should be indicated by a minus sign.) Show less Earrings Unlimited Cash Budget For the Three Months Ending June 30 April May June Quarter S $ Beginning cash balance S 77,000 $ 53,000 190,630 320,630 Add collections from customers 574,600 911,300 1.132.300 2.618,200 Total cash available 651,600 964,300 1,322,930 2,938,830 Less cash disbursements: Merchandise purchases 274,140 344,430 264,880 883,450 Advertising 230,000 230,000 230,000 690,000 Rent 21,000 21,000 21,000 63,000 Salaries 112.000 112,000 112,000 336,000 Commissions 26,240 40,240 20,240 86,720 Utilities 8,500 8,500 8,500 25,500 Equipment purchases 17,500 43,000 60,500 Dividends paid 17.250 17,250 Total cash disbursements 689,130 773,670 699,620 2.162.420 Excess (deficiency) of cash available over 190,630 623,310 776,410 disbursements (37.530) 190,630 Financing Borrowings 90,530 90,530 Repayments (90,530) (90,530) Interest (2.716) (2.716) Total financing 90,530 0 (93,246) (2,716) $ S Ending cash balance S 53,000 190,630 530,064 773,694 Prepare 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. Show less Earrings Unlimited Budgeted Income Statement For the Three Months Ended June 30 Sales S 2,818,400 Variable expenses Cost of goods sold 932.240 Commissions 112,736 1,044,976 1,773,424 Contribution margin Fixed expenses: Salaries Advertising Insurance Rent Depreciation Utilities 336,000 690,000 9,900 63,000 51,000 25,500 Net operating income Interest expense Net income 1,175,400 598,024 2,716 595,308 Prepare a master budget for the three-month period ending June 30 that includes a budgeted balance sheet as of June 30. Earrings Unlimited Budgeted Balance Sheet June 30 Assets Total assets $ 0 Liabilities and Stockholders' Equity Total liabilities and stockholders' equity $ 0