PLEASE SHOW WORK AND FORMULA/PROGRAM

The company sells many styles of earrings, but all are sold for the same price-$20 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) February (actual) March (actual) April (budget) May (budget) 23, 200 29, 200 43,200 68,200 103,200 June (budget) July (budget) August (budget) September (budget) 53,200 33,200 31, 200 28,200 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 $5.60 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: 48 of sales Variable: Sales commissions Fixed: Advertising Rent Salaries Utilities Insurance Depreciation $ 360,000 $ 34,000 $ 138,000 $ 15,000 $ 4,600 $ 30,000 Insurance is paid on an annual basis, in November of each year. The company plans to purchase $24,000 in new equipment during May and $56,000 in new equipment during June; both purchases will be for cash. The company declares dividends of $27,000 each quarter, payable in the first month of the following quarter. The company's balance sheet as of March 31 is given below: $ 90,000 Assets Cash Accounts receivable ($58,400 February sales; $691,200 March sales) Inventory Prepaid insurance Property and equipment (net) Total assets Liabilities and Stockholders' Equity Accounts payable Dividends payable Common stock Retained earnings Total liabilities and stockholders' equity 749,600 152,768 29,000 1,110,000 $ 2,131,368 $ 116,000 27,000 1,120,000 868,368 $ 2,131,368 The company maintains a minimum cash balance of $66,000. 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 $66,000 in cash. Req 1A Req 1B Req 1C Req 1D Reg 2 Req 3 Req 4 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. Earrings Unlimited Budgeted Income Statement For the Three Months Ended June 30 Variable expenses: Fixed expenses: Req 1A Req 1B Req 1C Req 1D Reg 2 Reg 3 Req 4 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 lities and Stockholders' Equity Total liabilities and stockholders' equity