you have just been hired as a new management trainee by earnings unlimited a distributor of earnings 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

prepare a master budget for the three month period ending June 30 that includes a merchandise purchases budget and units and in dollars show the budget by month and in total

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

prepare a master budget for the three month period ending June 30 that includes a cash budget show the budget per month and in total determine any borrowing that would be needed to maintain the minimum cash balance of $60,000

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 contribution approach

prepare a master budget for the three month period ending June 30 that includes 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 comissions 4 of sales Fixed: Advertising $ 300,000 Rent $ 28,000 $ 126,000 Utilities $ 12,000 Insurance $ 4,000 Depreciation $ 24,000 Insurance is pold on an annual basis, in November of each year. The company plans to purchase $21000 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 cuarter Davable in the first month of the following quarter 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 ($44,880 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), we sul retaining at least DOU,Quy in Casni. 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. ces Req 1A Req 16 Reg 10 Req 10 Reg 2 Req3 Reg 4 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 $ 16 5 1,072,000 $1,632,000 $ $ $ June Quarter 52,000 221,000 16 $ 16 832,000 $3,536,000 Reg 18 > Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Reg 10 Req 10 Reg 2 Req3 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. February sales March sales April sales May sales June sales Total cash collections Earrings Unlimited Schedule of Expected Cash Collections April May June S 44,800 470,400 67 200 214,400 750,400 107,200 326,400 1.142.400 166,400 729,600 $ 1.144,000 $ 1,416,000 Quarter $ 44.800 537,600 1,072,000 1,468,800 166,400 $ 3,289,600 ( Req1A Reg 10 > Answer is not complete. Complete this question by entering your answers in the tabs below. Reg 1A Req 18 Reg 10 Reg 10 Reg 2 Reg 3 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 67,000 102,000 52,000 221,000 Add: Desired ending merchandise inventory 40,800 20,800 12,800 12,800 Total needs 107,800 122,800 64,800 233,800 Loss Beginning merchandise inventory 20,800 40.800 20,800 20,800 Required purchases 87.000 82,000 44,000 213,000 Unit cost $ 5,00 5.00 S 5.00 $ 5.00 Required dollar purchases $ 435,000 $ 410,000 $ $ 220,000 1,065,000 S 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. Answer is not complete. Complete this question by entering your answers in the tabs below. a Reg 1A Reg 1B Reg 10 Reg 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 disbursements for merchandise purchases, by month and in total. Earrings Unlimited Budgeted Cash Disbursements for Merchandise Purchases April May June Quarter $ Accounts payable 110,000 $ 110,000 April purchases 202,500 202,500 405,000 May purchases 206,000 205,000 411,000 June purchases 110,000 110,000 S $ Total cash payments 312,500 408,500 315.000 1,036,000 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 June Quarter Beginning cash balance $ 84,000 $50,720 S 244,540 $ 84.000 Add collections from customers 729,610 1.154,000 1.416,000 Total cash available 813,600 1,204,720 1,660,540 84.000 Less cash disbursements Merchandise purchases 312,500 409,500 315,000 1,037,000 Advertising 42,8803 63,2803 35,280 141.440 Rent 300,000 300,000 300,000 900,000 Salaries 28,000 28,000 28,000 3 B4,000 Commissions 126,000 126,000 3 126,000 378,000 Utilities 12.000 12.000 12,000 36,000 Equipment purchases 21,000 50,000 71.000 Dividends paid 22,500 22,500 Total cash disbursements 843,880 959,780 866.280 2,669.940 Excess (deficiency) of cash available over disbursements (30,280) 244.940 794 260 (2,585,940) Financing Borrowings 91,000 91,000 Repayments (91000) (91.000) Interest (2,750) (2,750) Total financing 91,000 0 (93,750) (2750) $ Ending cash balance 60.720 $ 244,940 $ 700,510 119 KARAO 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 $3,536,000 Sales Variable expenses Purchases Commissions 1,105,000 141,440 1,246,440 2,289,560 > Contribution margin Fixed expenses Advertising Rent Salaries Utilities Insurance Depreciation OOOOO 900,000 84,000 378,000 36,000 11,143 72,000 Not operating income 1,481,143 808.417 2.750 3 805,667 Interest expense Net income Reg 1A Reg 13 Reg 1C Reg 10 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 Cash Accounts receivable O $ 702,530 X 828,800 14,857 X 64,000 1,049,000 Prepaid insurance Inventory Property and equipment, net Total assets 2.659.187 Liabilities and Stockholders' Equity Accounts payable $ 110,000 Dividends payable 22,500 Common stock 1,000,000 Retained earnings 1,527,087 Total liabilities and stockholders' equity 2.659,587