You have just been hired as a new management trainee by Earrings Unlimited, a distributor of earrings to various re in shopping malls across the country. In the past, the company has done very little in the way of budgeting and at c year has experienced a shortage of cash. Since you are well trained in budgeting, you have decided to prepare a the upcoming second quarter. To this end, you have worked with accounting and other areas to gather the inform below. The company sells many styles of earrings, but all are sold for the same price$17 per pair. Actual sales of earrir 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 h month to supply 40% of the earrings sold in the following month. Suppliers are paid $5.30 for a pair of earrings. One-half of a month's purchases is paid for in the month of pi paid for in the following month. All sales are on credit. Only 20% of a month's sales are collected in the mon 70% is collected in the following month, and the remaining 10% is collected in the second month following negligible. Monthly operating expenses for the company are given below: Variable: 4% of sales Fixed:

Advertising 330,000 Rent $ 31,000 Salaries $ 132,000 Utilities $ 13,500 Insurance $ 4,300 Depreciation $ 27,000 Insurance is paid on an annual basis, in November of each year. The company plans to purchase $22,500 in new equipment during May and $53,000 in new equipment dur will be for cash. The company declares dividends of $24,750 each quarter, payable in the first month of the t The company's balance sheet as of March 31 is given below: Cash Accounts receivable ($48,620 February sales; $579,360 March sales) Inventory Prepaid insurance Property and equipment (net) Total assets Liabilities and Stockholders' Equity Accounts payable Dividends payable Common stock Retained earnings Total liabilities and stockholders' equity $ 87,000 627,980 143,312 27,500 1,080,000 $ 1,965,792 $ 113,000 24,750 1,060, 000 768,042 $ 1,965, 792 The company maintains a minimum cash balance of $63,000. All borrowing is done at the beginning of a mc 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 month. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is ne of the quarter, the company would pay the bank all of the accumulated interest on the loan and as much c increments of $1,000), while still retaining at least $63,000 in cash.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. A schedule of expected cash collections, by month and in total. A merchandise purchases budget in units and in dollars. Show the budget by month and in total. A schedule of expected cash disbursements for merchandise purchases, by month and in total. A cash budget. Show the budget by month and in total. Determine any borrowing that would be needed cash balance of $63,000. A budgeted income statement for the three-month period ending June 30. Use the contribution approa A budgeted balance sheet as of June 30.