EditViewHistoryBookmarksWindowHelpQ 8 Thu Maezto.mheducation.comkili ContentB https://learn-us-east-1-prod-fleet01-x..M Question 1 - Week Three Chapter 8 C.awww.gauthmath.comNerdify | #1 Learning Help forWeek Three Chapter 8 Case iSavedHelpSave & ExitSubmitYou 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. Because you are well trained in budgeting, you have decided to prepare a master budgetfor the upcoming second quarter. To this end, you have worked with accounting and other areas to gather the information assembledbelow.50pointsThe company sells many styles of earrings, but all are sold for the same price-$14 per pair. Actual sales of earrings for the last threemonths and budgeted sales for the next six months follow (in pairs of earrings):eBookJanuary (actual)20, 800June (budget)0 , 800PrintFebruary (actual)26, 800July (budget)30, 800March (actual)40 , 800August (budget)28, 800ReferencesApril (budget)65, 800September( budget )25 , 800May (budget)100, 800The 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 $4.40 for a pair of earrings. One-half of a month's purchases is paid for in the month of purchase; the other half ispaid for in the following month. All sales are on credit. Only 20% of a month's sales are collected in the month of sale. An additional70% are collected in the following month, and the remaining 10% are collected in the second month following sale. Bad debts havebeen negligible.Monthly operating expenses for the company are given below:Variable:Sales commissions4% of salesFixed:Advertising240, 000DontMcPrev1 of 1Next23A30@#O568NOPYUWERTQK-. . .FASDGHMXCVBNZ1commandoption Safari FileEditView HistoryBookmarksWindow Helpezto.mheducation.comContentB https://learn-us-east-1-prod-fleet01-X.M Question 1 - Week Three Chapter & C.awww.gauthmath.comDO NeWeek Three Chapter 8 Case iSavedHelpSave &Monthly operating expenses for the company are given below:Variable:Sales commissions4% of salesFixed:Advertising$ 240, 000Rent$ 22,000Salaries$ 114, 00050Utilities$ 9,000pointsInsurance$ 3, 40Depreciation$ 18, 000eBookInsurance is paid on an annual basis, in November of each year.PrintThe company plans to purchase $18,000 in new equipment during May and $44,000 in new equipment during June; both purchasesReferenceswill be for cash. The company declares dividends of $18,000 each quarter, payable in the first month of the following quarter.The company's balance sheet as of March 31 is given below:AssetsCash$78, 000Accounts receivable ($37,520 February sales; $456, 960March sales)494, 480Inventory115 , 808Prepaid insurance23 , 000Property and equipment (net)990, 000Total assets$ 1, 701, 288Liabilities and Stockholders' EquityAccounts payable$ 104, 000Dividends payable18 , 000Common stock380 , 000Retained earnings699, 288Total liabilities and stockholders' equity$ 1, 701, 288Prev1 of 1Next >MAY23AdA30@8OOW #2A56UOPQWERTYSDFGKAH Prepare a master budget for the three-month period ending June 30. Include the following detailed schedules:eBook1. a. A sales budget, by month and in total.Printb. 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.Referencesd. 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 $54,000.3. 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.Required 1ARequired 1BRequired 1CRequired 1DRequired 2Required 3Required 4Prepare a master budget for the three-month period ending June 30 that includes a budgeted income statement for the three-month period ending June 30. Use the contribution approach