You are the new manager of the local Best Deal Electronics store. Top management of Best Deal Electronics is corvinced that management traning should include the active participation of store managars in the budgeting process. You have been asked to prepare a complete msster budget for your store for June, July, and August Al accounting is done centrally so you have no expert help on the premises. In addition, somorrow the branch manager and the assistant controler will be Fere to examine your work at that time, they will assist you in formulating the finai budget documere The ides is to have you prepare the initial budget on your own so that you gain more contidence about accounting matters. You want to make a favorable impression on your superiors, sa you gather the following friancial statement and sales data as of May 31, 20xe: (Click the icon to vew the data.) (i) (Click the icon to virw the additional information.) Riead the requirements Requirement 1. Prepare a budgeted income statement for the coming June through. August quster, a cash budget for each of the nent three months, and a budgeted balance sheet for Augut 31: 20068. Al operatons are evaluated on a before-income-tax bass, so income taxes may be ignored here Belore we prepared the budgeted income statements, cash budgets, and budgeted balance sheet, lers prepare a cales budget, a schedile of cash collections trom customers, a purchases budget a August quarter. More info Credit sales are 60% of total sales. Ninety percent of each credit account is collected in the month following the sale and the remaining 10% is collected in the subsequent month. Assume that bad debts are negligible and can be ignored. The accounts receivable on May 31 are the result of the credit sales for April and May: (0.100.60$120,000)+(1.00.60$150,000)=$97,200. The policy is to acquire enough inventory each month to equal the following month's projected cost of goods sold. All purchases are paid for in the month following purchase. The average gross profit on sales is 36%. Salaries, wages, and commissions average 30% of sales; all other variable expenses are 7% of sales. Fixed expenses for rent, property taxes, and miscellaneous payroll and other items are $7,000 monthly. Assume that these variable and fixed expenses require cash disbursements each month. Depreciation is $1,000 monthly. In June, $7,000 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. Assume that a minimum cash balance of $10,000 is to be maintained. Also assume that all borrowings are effective at the beginning of the month and all repayments are made at the end of the month of repayment. Interest is compounded and added to the outstanding balance each month, but interest is paid only at the ends of months when principal is repaid. The interest rate is 9% per annum; round interest computations and interest payments to the nearest dollar. Interest payments may be any dollar amount, but all borrowing and repayments of principal are made in multiples of $1,000. Requirements 1. Prepare a budgeted inctome statement for the coming June-August quarter, a cash budget for each of the next 3 months, and a budgeted balance sheet for August 31, 20X8. All operations are evaluated on a before-income-tax basis, so income taxes may be ignored here. 2. Explain why there is a need for a bank loan and what operating sources supply cash for repaying the bank loan