Regency Jewelers, a distributor of jewels for multiple retail stores found in malls around the country, has recently engaged you as an executive apprentice. In the past, the firm has not implemented a budget and experienced cash flow issues at specific periods. You have chosen to prepare a master budget for the forthcoming second quarter since you have a lot of experience with budgeting. In order to do this, you have collaborated with accounting and other departments to compile the data shown below. The company sells many styles of jewels, but all are sold for the same price$$$$15$ per pair. Actual sales of jewels for the last three months and budgeted sales for the next six months follow $($in pairs of jewels$)$: January $($actual$)22,200$ June $($budget$)52,200$ February $($actual$)28,200$ July $($budget$)32,200$ March $($actual$)42,200$ August $($budget$)30,200$ April $($budget$)67,200$ September $($budget$)27,200$ May $($budget$)102,200$ The concentration of sales before and during May is due to National holiday Day. Sufficient inventory should be on hand at the end of each month to supply $40\%$ of the jewels sold in the following month. Page $2$ of $5$ Suppliers are paid $$5\mathrm{.}10$ for a pair of jewels. 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. $20\%$ of a month's sales are collected in the month of sale and 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 $4\%$ of sales Fixed: Advertising $ $310,000$ Rent $ $29,000$ Salaries $ $128,000$ Utilities $ $12,500$ Insurance $ $4,100$ Depreciation $ $25,000$ Insurance is paid on an annual basis, in November of each year. The company plans to purchase $$21,500$ in new equipment during May and $$51,000$ in new equipment during June; both purchases will be for cash. The company declares dividends of $$23,250$ each quarter, payable in the first month of the following quarter. The company's balance sheet as of March $31$ is given below: Assets Cash $ $85,000$ Accounts receivable $($$$42,300$ February sales; $$506,400$ March sales$)548,700$ Inventory $137,088$ Prepaid insurance $26,500$ Property and equipment $($net$)1,060,000$ Total assets $ $1,857,288$ Liabilities and Stockholders' Equity Accounts payable $ $111,000$ Page $3$ of $5$ Dividends payable $23,250$ Common stock $1,020,000$ Retained earnings $703,038$ Total liabilities and stockholders' equity $ $1,857,288$ The company maintains a minimum cash balance of $$61,000.$ 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 $$61,000$ in cash. Assume that in the month of July, the Regency Jewelers has obtained some Actual data for the $2$nd quarter. The company has approached you to analyze the actual data and compare the following with the budgeted amounts. Sales $3384000$ Cash Collected $3083000$ Merchandise Purchased $1058700$ Cash paid for merchandise purchase $1020300$ Advertising Expenses $950000$ Contribution Margin $2090680$ Net Income $540450$ Required: Prepare a master budget for the three$-$month period ending June $30.$ Include the following detailed schedules: $1.$ Schedule expected cash disbursements $2.$ Cash budget $3.$ Budgeted income statement.