Knockoffs Unlimited, a nationwide distributor of low-cost imitation designer necklaces, has an exclusive franchise on the distribution of the necklaces, and sales have grown so rapidly over the past few years that it has become necessary to add new members to the management team. To date, the company's budgeting practices have been inferior, and at times the company has experienced a cash shortage. 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 eager to make a favourable impression on the president and have assembled the information below.

The necklaces are sold to retailers for $10 each. Recent and forecast sales in units are as follows: January (actual) 23,588 June 6?,888 February (actual) 43,898 July 47,088 March (actual) 56,888 August 45,888 April 52,888 September 42,888 May 116,888 The large buildup in sales before and during Magir is due to Mother's Day. Ending inventories should be equal to 40% of the next month's sales in units. The necklaces cost the companyr $4 each. Purchases are paid for as follows: 50% in the month of purchase and the remaining 50% 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% ofa month's sales are collected by monthend. 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. The company's monthly selling and administrative expenses are given below: Variable: Sales commissions 4% of sales Fixed: Advertising $251, 000 Rent 26,500 Wages and salaries 126, 409 Utilities 13, 800 Insurance 6, 490 Depreciation 31, 090All selling and administrative expenses are paid during the month, in cash, with the exception of depreciation and insurance. Insurance is paid on an annual basis, in November of each year. The company plans to purchase $22,800 in new equipment during May and $57,000 in new equipment during June; both purchases will be paid in cash. The company declares dividends of $1 8,400 each quarter. payable in the rst month of the following quarter. The company's balance sheet at March 31 is given below: Assets Cash a: 91,000 Accounts receivable ($43,000 February sales; $443,390 March sales) 491,on Inventory 131,200 Prepaid insurance 44,800 Fixed assets, net of depreciation 1,035,000 Total assets $1,793,000 Liabilities and Shareholders' Equity Accounts payable $ 132,800 Dividends payable 18,400 Comon shares 9?6,000 Retained earnings 671,800 Total liabilities and shareholders' equity $1,793,000 The company wants a minimum ending cash balance each month of $50,000. All borrowing is done at the beginning of the month, with any repayments made at the end of the month, The interest rate on these loans is 1% per month and must be paid at the end of each month based on the outstanding loan balance for that month, 2. A cash budget. Show the budget by month and in total. (Round your interme down your interest calculations to the next whole dollar amount. Cash defi leave any empty spaces; input a 0 wherever it is required.) KNOCKOFFS UNLIMITED Cash Budget For the Three Months Ending June 30 April May June Quarter Cash balance, beginning 91.000 21.000 Add receipts from customers 600,000 832.000 1.028.DO0 2.480,000 Total cash available 890.000 862.000 1.028.000 2.580.000 Less disbursements Purchase of inventory 324.000 384.000 310.800 1,018.800 Advertising 251,000 251,000 251,000 753,000 Rent 28.500 26.500 28.500 79.500 Salaries and wages 128.400 128.400 128.400 378.200 Sales commissions 32.800 48.400 28.800 108.000 Utilities 13,800 13.800 13.800 41.400 Dividends paid 18.400 18.400 Equipment purchases 22,800 57.000 78.800 Total disbursements 702.900 870.900 812.300 2.478.100 Excess (deficiency) of receipts over disbursements (102,800) (8,900) 215.700 103.800 Financing Borrowings Repayments Interest Total financing (10m ng) Cash balance, ending Need to calculate the Financing half All the top portion is right