I need help completing #4. I need help understanding how to calculate the Accounts receiveable. the number i came up with is incorrect. I also need assistance with all of the other calculations as well

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 comprehensive budgets for the upcoming second quarter in order to show management the benefits that can be gained from an integrated budgeting program. 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$15 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) 21,000 June (budget) 51,000 February (actual) 27,000 July (budget) 31,000 March (actual) 41,000 August (budget) 29,000 April (budget) 66,000 September (budget) 26,000 May (budget) 101,000 The concentration of sales before and during May is due to Mothers 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 $4.5 for a pair of earrings. One-half of a months purchases is paid for in the month of purchase; the other half is paid for in the following month. All sales are on credit, with no discount, and payable within 15 days. The company has found, however, that only 20% of a months 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: Sales commissions 4% of sales Fixed: Advertising $ 250,000 Rent $ 23,000 Salaries $ 116,000 Utilities $ 9,500 Insurance $ 3,500 Depreciation $ 19,000 Insurance is paid on an annual basis, in November of each year. The company plans to purchase $18,500 in new equipment during May and $45,000 in new equipment during June; both purchases will be for cash. The company declares dividends of $18,750 each quarter, payable in the first month of the following quarter. A listing of the companys ledger accounts as of March 31 is given below: Assets Cash $ 79,000 Accounts receivable ($40,500 February sales;$492,000 March sales) 532,500 Inventory 118,800 Prepaid insurance 23,500 Property and equipment (net) 1,000,000 Total assets $ 1,753,800 Liabilities and Stockholders Equity Accounts payable $ 105,000 Dividends payable 18,750 Common stock 900,000 Retained earnings 730,050 Total liabilities and stockholders equity $ 1,753,800 The company maintains a minimum cash balance of $55,000. All borrowing is done at the beginning of a month; any repayments are 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 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 $55,000 in cash. Required: 1. Prepare a master budget for the three-month period ending June 30. Include the following detailed budgets: a. A sales budget, by month and in total. b. A schedule of expected cash collections from sales, by month and in total. c. A merchandise purchases budget in units and in dollars. Show the budget by month and in total. (Round unit cost of purchases to 1 decimal place.) 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. (Cash deficiency, repayments and interest should be indicated by a minus sign.) 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. *****Select a topic from the case and explain personal position****** Comments Expert Answer AnonymousAnonymous answered this Was this answer helpful? 0 1 28 answers Anonymous 28 answers 2.

sales budget

	april	may	june	quarter
budgeted unit sales	66000	101000	51000	218000
selling price per unit	15	15	15	15
total sales	990000	1515000	765000	3270000

schedule of expected cash collections

	april	may	june	quarter
February sales	40500			40500
march sales	460500	61500		492000
april sales	198000	693000	99000	990000
may sales		303000	1060500	1363500
june sales			153000	153000
total cash collections	669000	1057500	1312500	3039000

merchandise purschases budget

	april	may	june	quarter
budgeted unit sales	66000	101000	51000	218000
add desired ending inventory	40400	20400	12400	12400
total needs	106400	121400	63400	230400
less beginning inventory	26400	40400	20400	26400
required purchases	80000	81000	43000	204000
unit cost	4.5	4.5	4.5	4.5
required dollar purchases	360000	364500	193500	918000

budgeted cash disburesements for merchandise purchases

	april	may	june	quarter
accounts payable	105000			105000
april purchases	180000	180000		360000
may purchases		182250	182250	364500
june purchases			96750	96750
total cash payments	285000	362250	279000	926250

2.

	april	may	june	quarter
beginning cash balance	79000	55150	272800	79000
add collections	669000	1057500	1312500	3039000
total cash available	748000	1112650	1585300	3118000
less disbursements:
merchandise purchases	285000	362250	279000	926250
advertising	250000	250000	250000	750000
rent	23000	23000	23000	69000
salaries	116000	116000	116000	348000
commissions	39600	60600	30600	130800
utilities	9500	9500	9500	28500
equipment purchases		18500	45000	63500
dividends paid	18750			18750
financing:
borrowings	49000			49000
repayments			-49000	-49000
interest			-1470	-1470
total financing	49000	0	-50470	-1470
ending cash balance	55150	272800	781730	781730

3

budgeted income statement

three months ended june 30
sales		3270000
variable expenses
cost of goods sold	981000
commissions	130800	1111800
contribution margin		2158200
fixed expenses
advertising	750000
rent	69000
salaries	348000
utilities	28500
insurance	10500
depreciation	57000	1263000
net operating income		895200
interest expense		1470
net income		893730

4 budgeted balance sheet as of june 30

assets
cash	781730
accounts receivable
prepaid insurance
inventory
total assets
liabilities and stockholder's equity
accounts payable, purchases
dividends payable
common stock
retained earinings
total liabilities and stockholder's equity