You are the new manager of Robin Electronics store in the Betterball Mall. Top management of Robin Electronics is convinced that management training should include the active participation of store managers in the budgeting process. You have been asked to prepare a complete master budget for your store for June, July, and August. All accounting is done centrally, so you have no expert help on the premises. In addition, tomorrow the branch manager and the assistant controller will be here to examine your work. At that time, they will assist you in formulating the final budget document. The idea is to have your prepare the initial budget on your own so that you gain more confidence about accounting matters. You want to make a favorable impression on your superiors, so you gather the following data as of May 31, 2023: b. Credit accounts are collected 30% in the month of the sale, 50% in the month following the sale, and 20% in the subsequent month. Assume that bad debts are negligible and can be ignored. c. The accounts receivable on May 31 are the result of the credit sales for April and May: d. The average gross profit on sales is 40% (i.e., cost of goods sold is 60% of sales) e. The policy is to acquire enough inventory each month to equal 25% of the following month's projected cost of goods sold. f. 60% of a month's inventory purchases is paid for in the month of purchase and 40% is paid for in the following month. The $177,000 balance in accounts payable at May 31 includes the $162,000 that are the result of May purchases of inventory g. Salaries, wages, and commissions average 24% of sales; all other variable expenses are 5% of sales h. Fixed expenses for rent, property taxes, and miscellaneous payroll and other items are $50,000 monthly. Assume that these variable and fixed expenses require cash disbursements each month. Depreciation is $6,000 monthly i. In June, $15,000 is going to be disbursed for fixtures acquired and recorded in furniture and fixtures in May. The May 31 balance of accounts payable includes this amount i. Assume that a minimum cash balance of $10,000 is to be maintained. The company has an agreement with a local 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 the interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest (on the portion of the principal repaid) at the end of the quarter. Required: Prepare a Master Budget (comprised of the following budgets): 1. Prepare a Sales Budget: Cash Budget Cash Sales Credit Sales Total Sales 2. Prepare a Cash Collections from Sales Budget: Cash Collections from Sales Budget Cash Sales April Credit Sales May Credit Sales June Credit Sales July Credit Sales August Credit Sales Total Cash Collected 3. Prepare a Purchases Budget: Purchases Budget Cost of Goods Sold Plus: EI (FG) Total Needs Minus: BI (FG) Required Purchases 4. Prepare a Cash Disbursements for Purchases Budget: Cash Dishursements for Purchases Budget May Purchases June Purchases July Purchases August Purchases Total Disbursements for Purchases 5. Prepare an Operating Expenses Budget Onerating Expenses Budget Salaries, Wages, and Commissions Other Variable Expenses Depreciation Fixed Expenses Total Operating Expenses Cash Sales Credit Sales Total Sales Credit Sales Uncollected \% Total \begin{tabular}{|r|r|} \hline April & May \\ \hline 210,000 & 180,000 \\ \hline 490,000 & 420,000 \\ \hline 700,000 & 600,000 \\ \hline \hline \end{tabular} Accounts Receivable July August Total \begin{tabular}{|r|r|} \hline July & August \\ \hline & \\ \hline \end{tabular} 140,000 September \#REF! \begin{tabular}{|c|c|c|c|} \hline June & July & August & Total \\ \hline 540,000 & & & \\ \hline 150,000 & & & \\ \hline 690,000 & & & \\ \hline(135,000) & & & \\ \hline 555,000 & & & \\ \hline 555,000 & & & 1,650,000 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|} \hline & 317,000 & & & 980,000 \\ \hline \multicolumn{5}{|c|}{ 6. Prepare a Cash Disbursements for Operating Expenses Budget } \\ \hline & June & July & August & Total \\ \hline Salaries, Wages, and Commissions & 216,000 & & & \\ \hline Other Variable Expenses & 45,000 & & & \\ \hline Fixed Expenses & 50,000 & & & \\ \hline \multirow[t]{2}{*}{ Cash Disbursements } & 311,000 & & & \\ \hline & 311,000 & & & 962,000 \\ \hline & & & & \\ \hline \multicolumn{5}{|l|}{ 7. Prepare a Cash Budget: } \\ \hline Cash Budget & June & July & August & Total \\ \hline Beginning Cash Balance & 50,000 & & & \\ \hline \multicolumn{5}{|l|}{ Cash Receipts: } \\ \hline Cash Collections from Sales & 767,000 & & & \\ \hline Total Cash Available & 817,000 & & & \\ \hline \multicolumn{5}{|l|}{ Cash Disbursements: } \\ \hline Disbursements for Purchases & (495,000) & & & \\ \hline Disbursements for Fixtures & (15,000) & & & \\ \hline Disbursements for Operating Exps & (311,000) & & & \\ \hline Total Cash Disbursements & (821,000) & & & \\ \hline Net Cash Before Financing & (4,000) & & & \\ \hline \multicolumn{5}{|l|}{ Financing: } \\ \hline Borrowing & 14,000 & & & \\ \hline \multicolumn{5}{|l|}{ Repayment } \\ \hline \multicolumn{5}{|l|}{ Interest Expense } \\ \hline Total Financing & 14,000 & & & \\ \hline Net Cash After Financing & 10,000 & & & \\ \hline \multirow[t]{3}{*}{ Ending Cash Balance } & 10,000 & & & \\ \hline & 10,000 & & & 75,500 \\ \hline & June & July & Total & \\ \hline Amount Borrowed & 14,000 & & & \\ \hline Interest Rate & 0.01 & & & \\ \hline Interest per Month & 140 & & & \\ \hline Number of Months & 3 & & & \\ \hline \multirow[t]{2}{*}{ Total Interest Due } & 420 & & & \\ \hline & 420 & & & \\ \hline \multicolumn{5}{|c|}{ 8. Prepare a Budgeted Income Statement: } \\ \hline \multicolumn{5}{|l|}{ Sales } \\ \hline \multicolumn{5}{|l|}{COGS(60%)} \\ \hline \multicolumn{5}{|l|}{ Gross Margin (40\%) } \\ \hline \multicolumn{5}{|l|}{ Operating Expenses } \\ \hline \multicolumn{5}{|l|}{ Net Operating Income } \\ \hline \multicolumn{5}{|l|}{ Interest Expense } \\ \hline \multicolumn{5}{|l|}{ Net Income } \\ \hline & 139,500 & & & \\ \hline \end{tabular} 9. Prepare a Budgeted Balance Sheet: \begin{tabular}{|c|c|c|} \hline Assets: & 8/30/23 & \\ \hline \multicolumn{3}{|l|}{ Cash } \\ \hline \multicolumn{3}{|l|}{ Accounts Receivable } \\ \hline \multicolumn{3}{|l|}{ Merchandise Inventory } \\ \hline \multicolumn{3}{|l|}{ Furniture and Fixtures } \\ \hline \multicolumn{3}{|l|}{ Depreciation } \\ \hline Total Assets & & 1,083,500 \\ \hline \multicolumn{3}{|l|}{ Liabilities\& SE: } \\ \hline \multicolumn{3}{|l|}{ Accounts Payable } \\ \hline \multicolumn{3}{|l|}{ Interest Expense Payable } \\ \hline \multicolumn{3}{|l|}{ Notes Payable } \\ \hline \multicolumn{3}{|l|}{ Total Current Liabilities } \\ \hline \multicolumn{3}{|l|}{ Retained Earnings: } \\ \hline \multicolumn{3}{|c|}{ Beginning Retained Earnings } \\ \hline \multicolumn{3}{|l|}{+ Net Income } \\ \hline Total Liabilities and SE & & 1,083,500 \\ \hline \end{tabular}