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. Because 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$16 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)	21,200	June (budget)	51,200
February (actual)	27,200	July (budget)	31,200
March (actual)	41,200	August (budget)	29,200
April (budget)	66,200	September (budget)	26,200
May (budget)	101,200

The concentration of sales before and during May is due to Mothers Day. Sufficient inventory should be on hand at the end of each month to supply 40% of the earrings sold in the following month.

Suppliers are paid $4.60 for a pair of earrings. One-half of a months 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 months sales are collected in the month of sale. An additional 70% are collected in the following month, and the remaining 10% are collected in the second month following sale. Bad debts have been negligible.

Monthly operating expenses for the company are given below:

Variable:
Sales commissions	4	% of sales
Fixed:
Advertising	$ 260,000
Rent	$ 24,000
Salaries	$ 118,000
Utilities	$ 10,000
Insurance	$ 3,600
Depreciation	$ 20,000

Insurance is paid on an annual basis, in November of each year.

The company plans to purchase $19,000 in new equipment during May and $46,000 in new equipment during June; both purchases will be for cash. The company declares dividends of $19,500 each quarter, payable in the first month of the following quarter.

The companys balance sheet as of March 31 is given below:

Assets
Cash	$ 80,000
Accounts receivable ($43,520 February sales; $527,360 March sales)	570,880
Inventory	121,808
Prepaid insurance	24,000
Property and equipment (net)	1,010,000
Total assets	$ 1,806,688
Liabilities and Stockholders Equity
Accounts payable	$ 106,000
Dividends payable	19,500
Common stock	920,000
Retained earnings	761,188
Total liabilities and stockholders equity	$ 1,806,688

The company maintains a minimum cash balance of $56,000. 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 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 $56,000 in cash.

Required:

Prepare a master budget for the three-month period ending June 30. Include the following detailed schedules:

1. 1. A sales budget, by month and in total.
   2. A schedule of expected cash collections, by month and in total.
   3. A merchandise purchases budget in units and in dollars. Show the budget by month and in total.
   4. 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 $56,000.
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. Here's the first 2 charts out of 7 charts that need to be filled in with Description in the missing tabs and the proper numbers. Please fill in these charts completed when you send back. I need today in a hour, I have 2 attempts.
5. Fill in the blanks in all the spaces in these charts when sending back. Thank You!!!
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Prepare a master budget for the three-month period ending June 30 that includes a budgeted balance sheet as of June 30 . \begin{tabular}{|c|c|} \hline \multicolumn{2}{|c|}{ Earrings Unlimited } \\ \hline Jungeted Balance Sheet \\ \hline & Assets \\ \hline & \\ \hline & \\ \hline & \\ \hline & \\ \hline & \\ \hline & \\ \hline \end{tabular} Prepare a master budget for the three-month period ending June 30 that includes a budgeted income statement for th three-month period ending June 30 . Use the contribution approach. Earrings Unlimited Cash Budget For the Three Months Ending June 30 \begin{tabular}{|l|l|l|l|l|} \hline & April & May & June & Quarter \\ \hline Beginning cash balance & & & & \\ \hline Add collections from customers & & & & \\ \hline Total cash available & & & & \\ \hline Less cash disbursements: & & & & \\ \hline Merchandise purchases & & & \\ \hline Advertising & & & & \\ \hline Rent & & & & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|} \hline \multicolumn{5}{|c|}{ Earrings Unlimited } \\ \hline \multicolumn{5}{|c|}{ Budgeted Cash Disbursements for Merchandise Purchases } \\ \hline & April & May & June & Quarter \\ \hline \multicolumn{5}{|l|}{ Accounts payable } \\ \hline \multicolumn{5}{|l|}{ April purchases } \\ \hline \multicolumn{5}{|l|}{ May purchases } \\ \hline \multicolumn{5}{|l|}{ June purchases } \\ \hline Total cash payments & & & & \\ \hline \end{tabular} \begin{tabular}{|l|l|l|l|l|} \hline \multicolumn{6}{|c|}{ Earrings Unlimited } \\ \hline \multicolumn{5}{|c|}{ Merchandise Purchases Budget } \\ \hline \multicolumn{1}{|c|}{ April } & \multicolumn{1}{|c|}{ May } & June & Quarter \\ \hline Budgeted unit sales & & & & \\ \hline & & & & \\ \hline Total needs & & & & \\ \hline & & & & \\ \hline Required purchases & & & & \\ \hline Unit cost & & & & \\ \hline Required dollar purchases & & & & \\ \hline \hline \end{tabular} \begin{tabular}{|l|l|l|l|l|} \hline \multicolumn{5}{|c|}{ Sales Budget } \\ \hline & April & May & June & Quarter \\ \hline Budgeted unit sales & & & & \\ \hline Selling price per unit & & & & \\ \hline Total sales & & & & \\ \hline \end{tabular} \begin{tabular}{|l|l|l|l|l|} \hline \multicolumn{5}{|c|}{ Earrings Unlimited } \\ \hline \multicolumn{4}{|c|}{ Schedule of Expected Cash Collections } \\ \hline February sales & & & & \\ \hline March sales & & & & \\ \hline April sales & & & & \\ \hline May sales & & & & \\ \hline June sales & & & & \\ \hline Total cash collections & & & & \\ \hline \hline \end{tabular}