Part 1 relates to Module 22 I have a template set up on the Part1BudgetSolution worksheet that you should use to complete the required budgets. You need to use cell references in the development of your budgets. You must use this worksheet to reference the data that is being inputted onto the budgets on the budget worksheet. If you type in any numbers in the solution and/or do not use this worksheet as your data worksheet, I will take off 50% of the total points for this part, since we use Excel so that we can update budgets or do what if analysis without retyping numbers. You should use this worksheet as your data field and only use cell references and formulas in your budgets. Your grade will be based on accuracy of your solution and correct usage of excel. The budget worksheet has formatted budgets for you to complete. The beauty behind excel is that managers can perform what-if analysis just by changing the data, so you do not need to retype the budgets if you have used cell references and formulas throughout. First Store prepares budgets quarterly. The following information is available for use in planning the second quarter budgets for 2021. First Store Balance Sheet March 31, 2021 Assets Liabilities Cash $ 1,000 Accounts payable  25,480 Accounts receivable  25,000 Dividends payable  5,000 Inventory  29,400 Total Liabilities $ 30,480 Prepaid Insurance  1,800 Net Fixtures  25,000 Stockholders' Equity Common Stock $ 15,720 Retained Earnings  36,000  51,720 Total Assets $ 82,200 Total liabilities and Stockholders' equity $ 82,200 Actual and forecasted sales for selected months in 2021 are as follows: Month Sales Revenue January $ 60,000 February  50,000 March  40,000 April  50,000 May  60,000 June  70,000 July  90,000 Monthly operating expenses are as follows, but note you will need to compute the monthly insurance expense: Wages and salaries $ 25,000 Depreciation 200 Utilities  1,000 Rent  2,000 Prepaid insurance was made for the upcoming 6 Months Cash dividends are declared during the third month of each quarter and are paid during the first month of the following quarter:  5,000 Operating expenses, except insurance and depreciation are paid monthly. Cost of goods sold is equal to 49% of sales revenue in month of sale Ending Inventories are sufficient for 120% of next month's cost of sales Purchases during any given month for merchandise are paid in full during the following month. All sales are on account. 50% collected during month of sale 40% collected during the next month after sale 10% collected the second month after sale The company requires a minimum cash balance of $ 1,000 at beginning of each month If there is a cash deficiency the company will take out short-tem financing so that the ending balance at the end of the month will meet the company requirement for a minimum cash balance. New Loans will be repaid if excess cash is over the required minimum cash balance in increments of $1,000 at an annual interest rate of 12% or monthly of 1.00% At the time the principal is repaid, interest is paid on the portion of principal that is repaid. All borrowing is at the beginning of the month, and all repayment is at the end of the month. Therefore, interest is incurred the month of the borrowing and thereafter until paid at the end of the month when there is sufficient funds to pay off more than $1,000. Required: Prepare and answer the following budgets and questions on the Part1BudgetSolution Worksheet. Make sure you use cell referencing and/or formulas. Please note that the quarter total column does not necessarily mean you total a row. When there are beginning and ending balances you need to show the beginning or ending balance for the quarter. For example, please review Exhibit 22.5 purchase budget page 22-10 the desired ending inventory and beginning inventory quarter total. Round to the nearest dollar. 1. Prepare a purchase budget for each month of the second quarter ending June 30, 2021 along with a quarter column. 2. Prepare a cash receipts schedule for each month of the second quarter ending June 30, 2021 along with a quarter column. Do not include borrowings. 3. Prepare a cash disbursements schedule for each month of the second quarter ending June 30, 2021 long with quarter column. Do not include repayments of borrowings. 4. Prepare a cash budget for each month of the second quarter ending June 30, 2021. Include budgeted borrowings and repayments if applicable. 5. Prepare a budgeted income statement for each month of the second quarter ending June 30, 2021 along with a quarter column. 6. Prepare a budgeted balance sheet as of June 30, 2021. 7. What if the company is able to decrease the annual interest rate on loans to 10%. Which budgets will change and what will be the new budgeted interest expense for the quarter ending June 30, 2021? You should only have to change the annual interest rate on this worksheet and all the appropriate budgets will change on the solution worksheet if you have set up your cell references correctly. Please make sure you return the annual interest rate back to the original percentage before you submit your solution. Budget #1 First Store Purchase Budget For the quarter ending June 30, 2021 April May June Quarter Total Budgeted Sales (As provided on Part 1) $ 50,000    Current cost of goods sold Desired ending inventory     Total Inventory needs Less beginning inventory     Budgeted purchases     Budget #2 First Store Schedule of Budgeted Cash Collections For the quarter ending June 30, 2021 April May June Quarter Total 50% of current month's sales 40% of last month's sales 10% of sales two months prior     Total cash receipts     Budget #3 First Store Schedule of Cash Disbursements For the quarter ending June 30, 2021 April May June Quarter Total Purchases of merchandise prior month Current cash operating expenses Cash Dividends     Total cash disbursements     Budget #4 First Store Cash Budget For the quarter ending June 30, 2021 April May June Quarter Total Cash balance, beginning Total Cash receipts (see budget #2) Total Cash disbursements (see Budget #3)     Excess(deficiency) cash available over disbursements Short-Term Financing: New Loans Repayments Interest Cash balance, ending     Budget #5 First Store Budgeted Income Statement For the quarter ending June 30, 2021 April May June Quarter Total Sales Cost of Sales     Gross Profit Expenses: Wages and salaries expense Depreciation expense Utilities expense Rent Expense Insurance Expense Interest expense     Total Expenses Net income     Budget #6 First Store Budgeted Balance Sheet June 30, 2021 Assets Liabilities Cash Accounts payable Accounts receivable Dividends payable Inventory Loan payable Prepaid Insurance Interest payable  Net Fixtures  Total Liabilities Stockholders' Equity Common Stock Retained Earnings   Total Assets  Total liabilities and Stockholders' equity  7. What if the company is able to decrease the annual interest rate on loans to 10%. Which budgets will change and what will be the new budgeted interest expense for the quarter ending June 30, 2021? You should only have to change the annual interest rate on this worksheet and all the appropriate budgets will change on the solution worksheet if you have 

set up your cell references correctly. Please make sure you return the annual interest rate back to the original percentage before you submit your solution.