Please only do #3 which is (the budgeted income statement). Please explain how you got the numbers and what this means for the company.

Xcel You have just been hired as a management trainee by Cravat Sales Company, a nationwide distributor of a designer's silk ties. The company has an exclusive franchise on the distribution of the ties, and sales have grown so rapidly over the last few years that it has become necessary to add new members to the manage ment team. 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 anxious to make a favorable CHECK FIGURE impression on the president and have assembled the information below. The company desires a minimum ending cash balance each month of $10,000. The ties are sold to retailers for $8 each. Recent and forecasted sales in units are as follows: January (actual). February (actual). 20,000 June. 24,000 July 28,000 35,000 45,000 60,000 40,000 36,000 32,000 (2) June ending cash balance: $10.730 (3) Net income: $151.880 March (actual). April May August September. The large buildup in sales before and during June is due to Father's Day. Ending inventories are supposed to equal 90% of the next month's sales in units. The ties cost the company $5 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 25% of a month's sales are collected by month-end. An additional 50% is collected in the following month, and the remaining 25% 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...... Fixed: Wages and salaries...... Utilities Insurance Depreciation. Miscellaneous. $1 per tie $22,000 $14,000 $1,200 $1,500 $3,000