Prepare a master budget for the three-month period ending June 30 that includes a sales budget, by month and in total. The company's balance sheet as of March 31 is given below:AssetsCashAccounts receivable ($50,320 February sales; $592,960March sales)InventoryPrepaid insuranceProperty and equipment (net)92,000643,280159,15230,0001,138, 000$ 2,054,432Total assetsLiabilities and Stockholders' EquityAccounts payableDividends payableCommon stockRetained earningsTotal liabilities and stockholders' equity118,00028,5001,160,000747,932$ 2,054,432The company maintains a minimum cash balance of $68,000. All borrowing is done at the beginning of a month; any repayments aremade 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 eachmonth. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. At the endof the quarter, the company would pay the bank all of the accumulated interest on the loan and as much of the loan as possible (inincrements 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 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 minimumcash 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.Req 1AReq 18Reg 10Reg 1DReq 2Req 3Reg 4Prepare a master budget for the three-month period ending June 30 that indudes a sales budget, by month and in total.Sales BudgetAprilMayJuneQuarterBudgeted unit salesSeling price per unitTotal sales Case 8-33 (Algo) Master Budget with Supporting Schedules [LO8-2, LO8-4, LO8-8, LO8-9, LO8-10]You have just been hired as a new management trainee by Earrings Unlimited, a distributor of earrings to various retail outlets locatedin shopping malls across the country. In the past, the company has done very little in the way of budgeting and at certain times of theyear has experienced a shortage of cash. Since you are well trained in budgeting, you have decided to prepare a master budget forthe upcoming second quarter. To this end, you have worked with accounting and other areas to gather the information assembledbelow.The company sells many styles of earrings, but all are sold for the same price-$17 per pair. Actual sales of earrings for the last threemonths and budgeted sales for the next six months follow (in pairs of earrings):January (actual)February (actual)March (actual)April (budget)May (budget)23, 600 June (budget)29,600 July (budget)43,60068,600103,60053,60033,60031,60028,600August (budget)September (budget)The concentration of sales before and during May is due to Mother's Day. Sufficient inventory should be on hand at the end of eachmonth to supply 40% of the earrings sold in the following month.Suppliers are paid S5.80 for a pair of earrings. One-half of a month's purchases is paid for in the month of purchase; the other half ispaid for in the following month. All sales are on credit. Only 20% of a month's sales are collected in the month of sale. An additional70% is collected in the following month, and the remaining 10% is collected in the second month following sale. Bad debts have beennegligible.Monthly operating expenses for the company are given below:Variable:Sales commissions4% of salesF1d:$ 380,00036,000$ 142,000$ 16,000$ 4,800$ 32,000AdvertisingRentSalariesUtilitiesInsuranceDepreciationInsurance 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 purchaseswill be for cash. The company declares dividends of $28,500 each quarter, payable in the first month of the following quarter.

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Case 8-33 (Algo) Master Budget with Supporting Schedules [LO8-2, LO8-4, LO8-8, LO8-9, LO8-10] 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-$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): January (actual) February (actual) March (actual) April (budget) May (budget) 23, 600 June (budget) 29,600 July (budget) 43,600 August (budget) 68, 600 September (budget) 103,600 53,600 33,600 31,600 28,600 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 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: Variable: 4% of sales Sales commissions Fixedi Advertising $ 380,000 36,000 $ 142,000 $ 16,000 $ 4,800 $ 32,000 Rent Salaries utilities Insurance Depreciation 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 quarter.