you have been hired as a new management trainee by earnings unlimited and distributor of earnings to various retail outlets located in shopping mall's 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 and you have worked with accounting and other areas to gather the information assembled below

prepare a master budget for three month period ending June 30 include the following detailed schedules

a sales budget by month and in total

a schedule of expected cash collections by month and in total

a merchandise purchases budget in units and in dollars so the budget by month and in total

a schedule of expected cash disbursement for merchandise purchases by month and in total

A cash budget so the budget by month and in total determined by any borrowing that would be needed to maintain the minimum cash balance of $60,000

A budgeted income statement for the three month period ending June 30 use the contribution approach

A budgeted balance sheet as of June 30

Check my 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-516 per pair. Actual sales of earrings for the last three months and budgeted sales for the next six months follow (in pairs of earrings) January (actual) 22,000 June (budget) 52,000 February (actual) 28,000 July (budget) 32,000 March (actual) 42,008 August (budget) 30,000 April (budget) 67,000 September (budget) 27,000 May (budget) 102,000 The concentration of sales before and during May is due to Mother's Day. Sufficient inventory should be on handhit the end of each month to supply 40% of the earrings sold in the following month. Suppliers are paid $5.00 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. Variable: Sales commissions 45 of sales Advertising $ 300,000 Rent $ 28,000 $ 126,000 Utilities $ 12,00 Insurance $ 4,000 Depreciation $ 24,000 Insurance is pold on an annual basis, in November of each year. The company plans to purchase $21.000 in new equipment during May and $50,000 in new equipment during June; both purchases will be for cash. The company declares dividends of $22.500 each ouarter Davable in the first month of the following quarter Fixed: Salaries The company plans to purchase $21,000 in new equipment during May and $50,000 in new equipment during June; both purchases will be for cash. The company declares dividends of $22,500 each quarter payable in the first month of the following quarter. The company's balance sheet as of March 31 is given below. Assets Cash $ 84,000 Accounts receivable (544,800 February sales: $537,600 March sales) 582,400 Inventory 134,000 Prepaid insurance 26,000 Property and equipment (net) 1,050,000 Total assets $ 1,876,400 Liabilities and Stockholders' Equity Accounts payable $ 110,000 Dividends payable 22,500 Common stock 1,000,000 Retained earnings 743,900 Total liabilities and stockholders' equity $ 1,876,400 The company maintains a minimum cash balance of $60,000. All borrowing is done at the beginning of a month; any repayments are made 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 month. 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 $60,000 in cash. Required: Prepare a master budget for the three-month period ending June 30. Include the following detailed schedules 1. 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 $60,000. 3. A budgeted income statement for the three-month period ending June 30. Use the contribution approach increments or 1,000), wresulterang at least DOU,QUV in Cast. Required: Prepare a master budget for the three-month period ending June 30. Include the following detailed schedules: 1. 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 $60,000 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. aces Req 1A Req 10 Reg 1C Reg 10 Reg 2 Req3 Req4 Prepare a master budget for the three-month period ending June 30 that includes a sales budget, by month and in total, Budgeted unit salos Selling price per unit Total sales Sales Budget April May 67,000 102.000 16 s 16 5 1,072,000 $1,632,000 $ $ $ June Quarter 52,000 221,000 16 $ 16 832,000 $3,536,000 Reg 18 > Required: Prepare a master budget for the three-month period ending June 30. Include the following detailed schedules: 1. 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 $60,000. 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. Reg 1A Reg 13 Req 1C Req 10 Reg 2 Reg 3 Reg 4 Prepare a master budget for the three- month period ending June 30 that includes a schedule of expected cash collections, by month and in total. Earrings Unlimited Schedule of Expected Cash Collections April May June Quarter February sales March sales April sales May sales June sales Total cash collections 0 0 $ 0$ 0 $ 0 0 05 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 $60,000 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. Req 1D Req 1A Reg 1B Reg 10 Reg 2 Req3 Reg 4 Prepare a master budget for the three-month period ending June 30 that includes a merchandise purchases budget in units and in dollars. Show the budget by month and in total. (Round unit cost to 2 decimal places.) Earrings Unlimited Merchandise Purchases Budget April May June Quarter Budgeted unit sales es 0 Total needs 0 0 0 0 0 0 0 0 Required purchases Unit cost Required dollar purchases $ 0 $ 0 $ 0 $ 0 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 $60,000 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. Req IA Req 1B Req 10 Req 10 Req2 Reg 3 Reg 4 ces Prepare a master budget for the three-month period ending June 30 that includes a schedule of expected cash disbursements for merchandise purchases, by month and in total Earrings Unlimited Budgeted Cash Disbursements for Merchandise Purchases April May June Quarter Accounts payable $ 0 April purchases 0 May purchases 0 June purchases 0 Total cash payments $ 0 $ 05 0 0 0 0 Prepare a master budget for the three-month period ending June 30 that includes 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 $60,000. (Cash deficiency, repayments and interest should be indicated by a minus sign.) Earrings Unlimited Cash Budget For the Three Months Ending June 30 April May Juno Quarter Beginning cash balance Add collections from customers Total cash available 0 0 0 Less cash disbursements: Merchandise purchases Advertising 0 Rent 0 Salaries Commissions Utilities Equipment purchases 0 Dividends paid Total cash disbursements Excess (deficiency) of cash available over disbursements 0 0 Financing: Borrowings Repayments Interest 0 Total financing 0 Ending cash balance $ $ 0 $ 0 $ 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Req 1A Reg 1B Req 1C Req 1D Reg 2 Reg 3 Reg 4 Prepare a master budget for the three-month period ending June 30 that includes a budgeted income statement for the three- month period ending June 30. Use the contribution approach. Earrings Unlimited Budgeted Income Statement For the Three Months Ended Juno 30 Variable expenses 0 0 Fixed expenses 0 0 0 (Reg 2 Reg 4 > Req 1A Req 1B Req 1C Req 1D Reg 2 Reg 3 Reg 4 Prepare a master budget for the three-month period ending June 30 that includes a budgeted balance sheet as of June 30. Earrings Unlimited Budgeted Balance Sheet June 30 Assets ces 0 Total assets $ Liabilities and Stockholders' Equity Total liabilities and stockholders' equity $ 0