Please check my work!

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--$14 per poir. Actual sales of earrings for the last three months and budgeted sales for the next six months follow (in pairs of earrings): January (actual) 20,800 June (budget) 50,800 February (actual) 26,800 July (budget) 30,800 March (actual) 40.800 August (budget) 28,800 April (budget) 65,800 September 25,800 (budget) May (budget) 100,800 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 $4.40 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 Sales commission 41 of sale. Tixed Advertising $ 240,000 $ 22,000 $ 114,000 $9.000 $ 3.400 Rent Salarios Utilities Insurance 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 $4.40 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 Sales commissions 41 of sales Tixedt Advertising $ 240,000 Rent $ 22,000 Salaries $ 114,000 Utilities $ 9,00 Insurance $ 3,400 Depreciation $ 18,000 Insurance is paid on an annual basis, in November of each year. The company plans to purchase $18,000 in new equipment during May and $44,000 in new equipment during June; both purchases will be for cash. The company declares dividends of $18,000 each quarter, poyable in the first month of the following quarter. The company's balance sheet as of March 31 is given below. $ 78,000 Assets Cash Accounts receivable (37.520 February wales: $456,960 March sales) Inventory Prepaid insurance Property and equipment (net) Total asets 494,480 115,00 23,000 990,900 $ 1,701,288 115,808 880,000 Assets Cash $ 78,000 Accounts receivable ($37,520 February sales: $456,960 March wales) 494,480 Triventory Prepaid insurance 23,000 Property and equipment (net) 990,000 Total assets $ 1,701,288 Liabilities and Stockholders' Equity Accounts payable $ 104,000 Dividends payable 18,000 Common stock Retained earnings 699,288 Total liabilities and stockholdera equity $ 1,701,288 The company maintains a minimum cash balance of $54,000. 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 $54,000 in cash. Required: Prepare a master budget for the three-month perlod ending June 30. Include the following detailed schedules: 1. 8. 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 $54,000 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, cash balance of $54,000. 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. Reg 1A Req 1C Req 18 Reg 10 Reg 3 Reg 2 Reg 4 Prepare a master budget for the three-month period ending June 30 that includes a sales budget, by month and in total. May Budgeted unit sales Selling price per unit Total sales Sales Budget April 65,800 100,800 141 $ 14 $ 921,200 $ 1.411,200 $ June Quarter 50,800 217,400 14 $ 14 711,200 $3,043,600 $ $ NA Req 1B > in total b. A schedule of expected cash collections, by month an 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 cash balance of $54,000. 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 Reg 13 18 Req 1C Reg 1D Reg 2 Reg 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 Schedule of Expected Cash Collections April May June Quarter February sales $ 37,520 $ 37,520 March sales 399,840 57,120 456,960 April sales 184,240 644,840 92.120 921,200 May sales 282,240 987,840 1,270,080 June sales 142.240 142,240 Total cash collections $ 621,600 $ 984,200 $ 1,222,200 $ 2,828,000 2. A cash budget. Show the budget by month and in total. Determine any borrowing that would be needed to maintain the mini cash balance of $54,000. 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. Reg 1A Req 1B R1q 1C Req 1D Reg 2 Reg 3 Reg 4 Prepare a master budget for the three-month perlod 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.) Earrings Unlimited Merchandise Purchases Budget April May June Quarter Budgeted unit sales 65,800 100,800 50.800 217,400 Add: Desired ending merchandise inventory 40,320 20,320 12,320 12,320 Total needs 106,120 121.120 63,120 229,720 Less: Beginning merchandise inventory 26,320 40,320 20,320 28,320 Required purchases 79,800 80.800 42,800 203,400 Unit cost $ 4.40 $ 4.40 $ 4.40 $ 4.40 Required dollar purchases $ 351,120 $ 355,520 $ 188,320 $ 894,960 Complete this question by entering your answers in the tabs below. Reg 1A Reg 13 Reg 10 keq 1D Req2 Req3 Reg 4 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. Earrings Unlimited Budgeted Cash Disbursements for Merchandise Purchases April May June Quarter Accounts payable $ 104,000 $ 104,000 April purchases 175,560 175,560 351,120 May purchases 177,760 177,760 355,520 June purchases 94,160 94,160 Total cash payments $ 279,560 $ 353,320 $ 271.920 904,800 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 $54,000. (Cash deficiency, repayments and interest should be indicated by a minus sign.) May June Quarter 54,192 $ 225,624 $ 78,000 984,200 1,222,200 2,828,000 1,038,392 1,447,824 2,906,000 Earrings Unlimited Cash Budget For the Three Months Ending June 30 April Beginning cash balance 78,000 $ Add collections from customers 621,600 Total cash available 99,600 Less cash disbursements: Merchandise purchases 279,560 Advertising 240,000 Rent 22,000 Salaries 114,000 Commissions 36,848 Utilities 9,000 Equipment purchases 0 Dividends paid 18,000 Total cash disbursements 719,408 Excess (deficiency) of cash available over disbursements (19,808) Financing Borrowings 74,000 Repayments Interest 0 353,320 240,000 22.000 114,000 56 448 9,000 18,000 0 812,768 225,624 271,920 240,000 22,000 114,000 28,448 9,000 44,000 0 729,368 718,456 904,800 720,000 66,000 342,000 121,744 27,000 62,000 18,000 2,261,544 644,456 0 0 (74,000) (2,220) 74,000 (74,000) (2.220) 0 Pro 2 of 6 Nov month period ending June 30. Use the contribution approach. Earrings Unlimited Budgeted Income Statement For the Three Months Ended June 30 Sales $ 3,043,600 Variable expenses: Cost of goods sold 956,560 Commissions 121,744 JO 1,078,304 1,965,296 Contribution margin Fixed expenses: Advertising Rent Salaries Utilities Insurance Depreciation Interest expense 720,000 66,000 342.000 27,000 10,200 54,000 2,220 1,221,420 743,876 Net operating income Net income 743,876 31 etv SA @ GB Prepare a master budget for the three-month period ending June 30 that includes a budgeted balance sh :46:59 Earrings Unlimited Budgeted Balance Sheet June 30 Assets Cash Accounts receivable Inventory Prepaid insurance Property and equipment, net $ 642,236 710,080 54,208 12,800 998,000 Total assets $ 2,417,324 Liabilities and Stockholders' Equity Accounts payable $ 94,160 Dividends payable 18,000 Common stock 880,000 Retained earnings 1,425,164 Total liabilities and stockholders' equity $ 2,417,324