The large buildup in sales before and during June is due to Father's Day. Ending inventories are supposed to equal $90\%$ of the next

month's sales in units. The ties cost the company $$5$ each. The company's monthly selling and administrative expenses are given below:

All selling and administrative expenses are paid during the month, in cash, with the exception of depreciation and insurance expired.

Land will be purchased during May for $$25,000$ cash. The company declares dividends of $$12,000$ each quarter, payable in the first

month of the following quarter. The company's balance sheet at March $31$ is given below: Cash

Accounts receivable $($ $$48,000$ February sales; $$168,000$ March sales$)$

Inventory $(31,500$ units$)$

Prepaid insurance

Fixed assets, net of depreciation

Total assets

The company has an agreement with a bank that allows it to borrow in increments of $$1,000$ at the beginning of each month, up to a total

loan balance of $$140,000.$ 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 $$1,000),$ while still retaining at least $$10,000$ in cash.

Required:

Prepare a master budget for the three$-$month period ending June $30.$ Include the following detailed budgets:

a$.$ A sales budget by month and in total.

b$.$ A schedule of expected cash collections from sales, 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.

A cash budget. Show the budget by month and in total.

$$14,000$

$216,000$

$157,500$

$14,400$

$173,100$

$$575,000$