prepare master budget you are the new manager of the Rapidbuy electronics store in the Mall of America. Top management of Rapidbuy electronics is convenced that management training should include active participation of the store managers in the budgeting process. You have been asked to prepare a complete master budget for your store for June. July and August. All accounting is done centrally so you have no expert help on the premises. In addition, tomorrow the branch manager and the assistant controller will be here to examine your work: at that time, they will assist you in formulating the final budget document. The idea is to have you prepare the initial budget on your own so that you gain more confidence about accounting matters. You want to make a favorable impression on your superiors. Credit sale are 90% of total sales. Eighty percent of each credit account is collected in the month following the sale and 20% is collected in the subsequent month. assume that bad debts are negligible and can be ignored. the accounts receivable on may 31, are result of the credit for April and May.(.20*.90*60,00)+ 1.0*.90*70,000)=73,800 cash 5,800 recent and projected sales inventory 86,800 April 60,000 Accounts Receivable 73,000 May 70,000 Net furniture & fixtures 33,600 June 140,000 Total 200,000 July 80,000 A/Payable 97,800 August 80,000 Owner's equity 102,200 September 60,000 Total Liabilities &Owner's equity 200,000 The average gross profit is 38%. the policy is to acquire enough inventory each month to equal the following month's projected cost of cost of goods sold. all purchase are paid for in the month following purchase. salaries, wages and commissions average 20% of sale; all other variable expense are 4% of sale. fixed expense for rent, property taxes and miscellaneous payroll and other items are $11,000 monthly. assume that these variable and fixed expense require cash disbursements each month. depreciation is 500 monthly. In June, 11,000 is going to be disbursed for fixture acquire and recorded in furniture and fixture in May. The 31,balance of accounts payable includes this amount. Assume that a minimum cash balance of 5,000 is to be maintained. Also assume that all borrowings are effective at the beginning of the month and all repayments are made at the end of the month of repayment. Interest is compounded and added to the outstanding balance each month, but interest is paid only at the ends of months when principal is repaid. The interest rate is 10% per year. round interest computations and interest payments to the nearest dollar. interest payments may be any dollar amount, but all borrowing and repayments of principals are made in multiples of 1,000. 1. prepare a budgeted income statement for the coming June _ august quarter, a cash budget 9for each of the next 3 months) and a budgeted balance sheet for August 31, 20x8. all operations are evaluated on a before-income-tax basis, so income taxes may by ignored here. 2. explain why there is a need for a bank loan and what operating sources supply cash for repaying the bank loan