tou heve juvi been hiked as a new menggement trakee by Carings Unimated a distributcr of eemings to varicut retal puffets iscated in shopsing mals acioss the country. in the rest, twe company has done very ltile in the way of budgeting and at certail times of the below The compary sels mamy styes of eartings, but al are sold for the aame price-5t4 pet paic Actual saies of eathicgs for the las4 theen monthe and budgeted laies for the nest cx manthe foliow in pairs of eaminght manth to susply 40 sh of the earrigis sold in the following month. neguptie. Morthly operating eapenseis for the comaaty are given below: hsueance is poid on an amal basis, in Nowmext of each yeir: wll be for cash. The company decteres dusends of 5:8.000 esch quantet payabie in the fiss monts of the folloming oustet. The company's balance sheec as of March 37 is givent below: The compary mantains a minim cash belance of 344,000 Al bonowisg is done at the begiting di a monet ary repeytients are made at the end of a month: The company has an agreement wet a bark thet alown the compeny to borsow in inctements of \$1.000 at the begnning of each of the quener, the conpany woud poy the berk all of the accumdated ieterest on the loes and as much of the loan as possible (p) incremens of 5 tipoop, while st: ieeahing at leats 554.000 in cash. Peoulrest Phegore a master busget for the thee-ments period ending lune 30. thatude the fotowing desaied schedulesk 1. A. A sales budget, by month and in iocat b. A schedule of expected cash coliections. by month and in totai 6. A sethedsle of eapected cash destursements for mercharid ve purchases, by month and in total 2. A cash budget. Show the budgel by morth and in todat. Destemine ay borroeing that would be ceeded to mairean the minimarn cails batance of $54,000 4. A budgeted balance sheet as of June 30 Cemptete this question by temtering yeur answers in the tabs belew. 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- $14 per pair. Actual sales of earrings for the last three months and budgeted sales for the next six months follow (in pairs of earrings): 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 $4.40 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: nsurance is paid on an annual basis, in November of each year. The company plans to purchase $18,000 in new equipment during May and $44,000 in new equipment during June; both purchases will be for cash. The company declares dividends of $18,000 each quarter, payable in the first month of the following quarter. The company's balance sheet as of March 31 is given below: The company maintains a minimum cash balance of $54,000. All borrowing is done at the beginning of a month; any repayments are nade 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 nonth. 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 ncrements of $1,000), while still retaining at least $54,000 in cash. Required: Prepare a master budget for the three-month period ending June 30 . Include the following detailed schedules: 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 $54,000 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