You have just been hired as a new management trainee by Eacrings Unhimited, a diatr butot of eamings to various retail evileds located in shopping malls across the country. In the past, the company has done very late in the way of budgeting and at certain times of the year has experienced a shortage of cash. Since you are wel trained in budgeting. you hime dedided to prepare a master bucget for the upcoming second quarter. To this end, you have worked with accounting and other areas to gather the infoemation assembled beliow The company seis many styles of earrings, but all are sold for the same price-517 pet paic. Actual saies of a arrings for the last three months and budgeted sales for the next wax mociths follow fn peirs of earingh: The concentration of sales before and dualing May is due to Mother's Day, Sutfictent inwentary should be on hand at the end of esch morth to supply 405 sof the earings vold in the followito month paid for in the following month. Al tales are or credit. Onily 20s of a month's sqes are coltected in the month of sabe. An addisonal Monthly operating expenses for the compary are given beicw Iivuriance is naid on an annual basis, nf towectber of eachiyes The company/s balance sheet as of March 3t is pren betow: The company's balance sheet as of March 31 is given below. The company mairtains a minimum cash balance of $68,000. All borrowing is done at the begining of a months any repayments are made at the end of a month. The company has an agreement with a bank that allows the company to bortow 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 ende of the quartet, the company would pay the bank all of the accumulnted interest on the foan and as much of the loan as possible fin increments of $1,000), while still retaining at least $68,000 in cash Required: Prepare a master budget for the three-month period ending June 30 include the following detailed nchedules: 1. a. A saies bodget, by month and in total. b. A schedule of expected cash coliections. by inointh and in total. c. A merchandise purchases budget in units and in dollars 5 how the budget by month and in total. d. A schedule of expected cosh disbursements for merchandise porchases, by month and in total. 2. A cash budget. Show the budget by month and in total. Determine any bonowing that would be fieded to maintah the minirnum cash balance of $68,000 3. A budgeted income statement for the three-month period ending June 30 Use the contribution approach; 4. A budgeted belince sheet as of June 30 Compiete this question by entering your answers in the tabs below. You have just been hired as a new management trainee by Earrings Unlimited, a distributor of earrings to various retall 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-\$17 per pair. Actual sales of earrings for the last three months and budgeted sales for the next six months follow (in pairs of earrings): 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 $5.80 for a pair of earrings One-half of a month's purchases is paid for in the month of purchase; the other half is poid 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. Manthly operating expenses for the company are glyen below: Insurnnce is paid on an annual bosis, in November of each yeor. Insurance is paid on an annual basis, in November of each year. The company plans to purchase $25,000 in new equipment during May and $58,000 in new equipment during June; both purchases will be for cash. The company declares dividends of $28,500 each quarter, payable in the first month of the following quartet. The company's balance sheet as of March 31 is given below: The company maintains a minimum cash balance of $68,000. All borrowing is clone at the beginning of a month; any repayments are made at the end of o 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 $68.000 in cash, Required: Prepare a master budget for the three-month perlod endang June 30 . include the followng detalled scheduless Required: Prepare a master budget for the three-month period ending June 30 , Include the following detalled 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 $68,000. 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