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 $-$$$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$)$:

$\backslash$table$[[$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,$26,200],[$May $($budget$),101,200,,]]$

The concentration of sales before and during May is due to Mother's 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\mathrm{.}60$ 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:

$\backslash$table$[[$Sales commissions,$4\%$ of sales$],[$Fixed:$],[$Advertising$,$$$260,000$

Complete this question by entering your answers in the tabs below.

$\backslash$table$[[$Req $1A,$Req $1$B$,$Req $1C,$Req $1$D$,$Req $2,$Req $3,$Req $4]]$

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.

Complete this question by entering your answers in the tabs below.

Req $1$B

Req $1C$

Req $1$ D

Req $3$

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.$)$

$\backslash$table$[[$Earrings Unlimited$],[$Merchandise Purchases Budget$],[,,,,,,,$Quarter,$],[$Budgeted unit sales,,,,,,,,$0],[$Add: Desired ending merchandise inventory$],[$Total needs,,$0,,0,,0,,0],[$Less: Beginning merchandise inventory$],[$Required purchases,,$0,,0,,0,,0],[$Unit cost$],[$Required dollar purchases,$$,0,$$$,0,$$$,0,$$$,0]]$

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.

$\backslash$table$[[$Earrings Unlimited$],[$Budgeted Cash Disbursements for Merchandise Purchases$],[,$April,May,June,,$],[$Accounts payable,,,,$$,0],[$April purchases,,,,,$0],[$May purchases,,,,,$0],[$June purchases,,,,,$0],[$Total cash payments,$0,0,0,,0]]$