You have just been hired as a new management trainee by Earrings Unlimited, a distributor of earrings to various retail outiets located in shopping malks across the country. In the past, the company has done very little in the wray of budgeting and, at certain times of the year, has experienced a shortage of cash. Because you are well trained in budgeting, you hawe decided to prepare a master budget for the upcoming second quarter. To this end, you have worked with accounting and ather areas to gather the information assembled below. The company sells many styles of earrings, but all are sold foe the same price- $13 per pair. Actual saies of earrings for the last three months and budgeted sales for the next sbe 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. Supplers are paid \$4.70 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 folowing month. All sales are on credit. Only 20% of a month's sales are collected in the month of sale. An additional 70% are collected in the following month, and the remaining to\% are collected in the second month following sale. Bad debts have been negligible. Monthly aperating expenses for the company are given belows. Insurance is paid on an annual basis, in November of each year. The company plans to purchase $19,500 in new equipment during May and $47,000 in new equipment during June; both purchases will be for cash. The company declares dividends of $20,250 each quarter, payable in the first month of the following quarter. The company's balance sheet as of March 31 is given belaw: The company maintains a mirimum cash balance of $57,000. Al borrowing is done at the beginning of a monthc any repayments are made at the end of a month. The company has an agreement with a bank that allows the comparry 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 $57,000 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 tatal. 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 $57,000. 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. Prepare a master budget for the three-month period ending June 30 that includes a cash budpet. Show the budget by month and in total. Determine any borrowing that would be needed to maintain the minimum cash balance of $57,000. Note: Cash defidency, repayments and interest should be indicated by a minus sign