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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-$15 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) 21, 080 June (budget) 51,080 February (actual) 27,800 July (budget) 31, 080 March (actual) 41, 080 August (budget ) 29,080 April (budget) 66,809 September (budget) 26,906 May (budget ) 101, 080 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 $4.50 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.Required: Prepare a master budget for the three-month period ending June 30. Include the following detailed schedules: 1. a. 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 $55,000. 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 14 Req 18 Req 1C Req 10 Req 2 Reg ] 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 April purchases May purchases June purchases Total cash payments S 0 $ Monthly operating expenses for the company are given below; Variable: Sales commissions 4% of sales Fixed: Advertising $ 250,090 Rent $ 23,090 Salaries 116,020 Utilities 9, 500 Insurance 3, 500 Depreciation 19, 000 Insurance is paid on an annual basis, In November of each year. The company plans to purchase $18.500 in new equipment during May and $45,000 in new equipment during June: both purchases will be for cash. The company declares dividends of $18,750 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 79,000 Accounts receivable ($40, 500 February sales; $492,090 March sales) 532,508 Inventory 118,800 Prepaid Insurance 23,500 Property and equipment (net) 1,000,000 Total assets $ 1,753, 800 Liabilities and Stockholders' Equity Accounts payable 105,090 Dividends payable 18,750 Common stock 900, 608 Retained earnings 730, 050 Total liabilities and stockholders equity $ 1, 753,809The company maintains a minimum cash balance of $55,000. 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 $65,000 in cash. Required: Prepare a master budget for the three-month period ending June 30. Include the following detailed schedules: 1. a. 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 $55,000. 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.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 $55,000. (Cash deficiency, repayments and interest should be indicated by a minus sign.) Earrings Unlimited Cash Budget For the Three Months Ending June 30 April May June Quarter Beginning cash balance Add collections from customers Total cash available 0 Less cash disbursements: Merchandise purchases Advertising Rent Salaries Commissions Utilities Equipment purchases Dividends pald Total cash disbursements Excess (deficiency) of cash available over disbursements 0 Financing: Borrowings Repayments Interest 0 0 Total financing 0 $ Ending cash balance S O $ Prou of 1 Next >Req 14 Req 18 Req 1C Req 1D Reg 2 Reg 3 Reg 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 18 Req 10 Req 10 Req 2 Reg 3 Reg 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 Liabilities and Stockholders' Equity Total liabilities and stockholders' equity S Required: Prepare a master budget for the three-month period ending June 30, Include the following detailed schedules: 1. a. 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 $55,000. 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 14 Reg 18 Reg 10 Reg 10 Reg 2 Req 3 Req 4 Prepare a master budget for the three-month period ending June 30 that includes a sales budget, by month and in total. Sales Budget April May June Quarter Budgeted unit sales 86.000 101,000 51,000 218 000 Selling price per unit 15 S 15 15 15 Total sales $ 090,000 $ 1.515.000 $ 765,000 $ 3.270,000 ( Reg 1A Req 18 >Required: Prepare a master budget for the three-month period ending June 30. Include the following detailed schedules; 1. a. 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 $55,000. 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 14 Req 10 Req 1C Reg 10 Rea 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 salon S March sales April sales May sales June sales Total cash collections O S Required: Prepare a master budget for the three-month period ending June 30. Include the following detailed schedules: 1. a. 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 $55,000. 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 Req 18 Reg 1C Req 10 Req 2 Reg 3 Ben 4 Prepare a master budget for the three-month period 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 Total needs Required purchases Unit cost Required dollar purchases $ 0 $ $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-$15 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] 21,000 June (budget) 51,020 February (actual) 27,900 July (budget) 11,090 March (actual) 41,090 August (budget) 29,090 April (budget) 60,090 September (budget ) 20,090 May (budget) 101,080 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 $4.50 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: Variables Sales commissions At of sales Fixed: Advertising $ 250,080 Rent 23,080 Salaries $ 116,090 Utilities 9,500 Insurance 3,509 10 650