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Yeu have junt hirned as a managertient trainee by Alsha f mhiomk a nationwide distributer of a designet's thik. The compary desires a minimuen ending

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Yeu have junt hirned as a managertient trainee by Alsha f mhiomk a nationwide distributer of a designet's thik. The compary desires a minimuen ending cash batance esch month of 310,000 . The ties are sold to retailers for 58 each. Reidnt and forecasted sales in units are at follews: The large buildup in sales before and during Juhe is due to Father's Day. Ending inventories ate supposed to equal 90% of the next month's sales in units. The ties cost the company 55 each. Purchases are paid for as follows: 50% in the month of purchase and remaining 50% in the following month. All sales are on credit, with no discount, and payable within 15 days. The company has found, however, that only 25% of a month's sales are collected by month-end. An additional 50% are collected in the following month, and the remaining 25% are collected in the second month following sale. Bad debts have been negliglble. The company's monthly selling and administrative expenses are given below: All splling and administrative expenset are paid during the month, in eash, with the exception of desereciation and insurance expired. Land will be purchased durine the month of May fer 525,000 cach. The compary. declares dividends of 512,000 each quarter, payable in the first month of the following quarter. The company's balance sheet at March 31 is given below: Total liabilities and shareholders' equity The compony has an agreement with a bank that allows it to borrow in inctements of $1,000 at the beginning of each month, up to a total Ioan balance of $160,000. 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 lin increment of $1,000), while retaining at least $10,000 in cash. Required: repare a master budget for the three-month period ending June 30 . Include the following detailed budgets: 1= 3. A sales budget by month and in total. ( 10 marks) b. A schedule of expected cash collection from sales, by month and in total. ( 10 marks) c. A merchandise purchases budget in units and in dollars. Show the budget by month and in total. (10 marks) d. A schedule of expected cash disbursements for merchandise purchases, by month and in total. (10 marks) A cash budget. Show the budget by month and in total ( 20 marks) A budgeted income statement for the three-month period ending June 30 . Use the contribution approach. (20 marks) A budgeted balance sheet as of June 30 . ( 20 marks)

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