The company maintains a minimum cash balance of $50,000. All borrowing is done at the beginning of a month any repayments are made at the end of a month Advertising $ 200.000 The company has an agreement with a bank that allows the company to borrow in increments of $1000 at the beginning of each month. The interest rate on these loans is 16 per month and for simplicity we will assume that interest is not compounded. Al 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 $1000), while still retaining at least $50,000 in cash Required: Prepare a master budget for the three month period ending June 30. Include the following detailed schedules: nsurance is paid on an annual basis, in November of each year. The company plans to purchase $16,000 in new equipment during May and $40,000 in new equipment during June; both purchases vill be for cash. The company declares dividends of $15,000 each quarter, payable in the first month of the following quarter. The company's balance sheet as of March 31 is given below: La. A sales budget, by month and in total b. A schedule of expected cash collections, by month and in total. CA 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 $50.000 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. 74.000 Accounts receivable 326,000 Tobruary sales: 3.320,000 March Bales) Inventory Pidura Property and equipment (net) 346,000 105,000 Complete this question by entering your answers in the tabs below. 21.000 Prepare a master budget for the three-month period ending Jun month period ending June 30. Use the contribution approach. $1.495,000 Liabilities and stockholders' Equity Accounts payable Dividenda payable Earrings Unlimited Budgeted Income Statement For the Three Months Ended June 30 Prepare a master budget for the three-month period ending June 30 that includes a cash budget. Show the budge and in total. Determine any borrowing that would be needed to maintain the minimum cash balance of $50,000. deficiency, repayments and interest should be indicated by a minus sign.) 500,000 Vanable expenses Ratained earnings Total liabilities and stockholders' equity "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. Earrings Unlimited Cash Budget For the Three Months Ending June 30 April May June Quarter The company sells many styles of earrings, but all are sold for the same price-$10 per pair. Actual sales of earrings for the last three months and budgeted sales for the next six months follow (in pairs of earrings): Beginning cash balance Add collections from customers Totalcash available Less cash disbursements Merchandise purchases Advertising Fixed expenses Rent January (actual) February (actual) March (actual) April (budget) May (budget 20,000 26,000 10,000 65,000 100,000 June (budget) July (budget) August (budget) September (budget) 50,000 30,000 20,000 25,000 Salarios Commissions Equipment purchases Dividends paid Total cash disbursements 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 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