**I only need help with completing the balance sheet in part 4. **

You have juet been hired ac a new management trainee by Earringe Unlimited, a dictributor of earringe to varioue rotail outlete located in shopping malis 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 sels 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) 22,600 June (budget) 28,600 July (budget 42,600 August (budget) 67,600 September (budget) 102,600 52 600 32.600 30,600 27.600 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 $5.3 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, with no discount, and payable within 15 days. The company has found, however that 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: Sales commissions 4% of sales Fixed $330,000 31,000 $ 132,000 S 13,500 $ 4,300 27 Rent Salaries 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 during June; both purchases will be for cash. The company declares dividends of $24,750 each quarter, payable in the first month of the following quarter A listing of the company's ledger accounts as of March 31 is given below Cash Accounts receivable ($48,620 February sales $579,360 March sales) Prepaid insurance Property and equipment (net) Total assets $ 87.000 627,980 143,312 27.500 080,000 $ 1,965,792 Liabilities and Stockholders' Equity Accounts payable Dividends payable Common stock Retained eamings Total liabilities and stockholders' equity $ 113,000 24,750 1,060,000 $ 1,965.792 The company maintains a minimum cash balance of $63,000. 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 $63,000 in cash. 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 Answer is complete and correct. Sales Budget April 67.600102,600 52,600222,800 June Quarter Budgeted unit sales Selling price per unit Total sales 17 17 17 1.149.200 1744,200 894,200 3,787,600 Answer is complete and correct. Earrings Unlimited Schedule of Expected Cash Collections April May June February sales March sales April sales May sales June sales Total cash 48,620 506,940 229,840 48,620 579,360 114,9201,149.200 348,8401,220,9401,569,780 178,840 1,514,700 3,525,800 72,420 804.440 178,840 785,400 1,225,700 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.) Answer is complete and correct. Earrings Unlimited Merchandise Purchases Budget April May June Quater Budgeted unit sales Add: Desired ending merchandise inventory Total needs 67,600102,60052,600222,800 41,04021,040 13,04013,040 235,840 27,040 208,800 5.3 108,640 27,040 81,600 5.3 432,480 123,640 1,040 82.600 65,640 21,040 27 44,600 Required purchases Unit cost 5.3 S 5.3 $ Required dollar purchases 437,780 236,380 1,106,640 d. A schedule of expected cash disbursements for merchandise purchases, by month and in total. Answer is complete and correct. Earrings Unlimited Budgeted Cash Disbursements for Merchandise Purchases April May June Accounts payable April purchases May purchases June purchases Total cash 113,000 432480 218,890 218,890437,780 118,190118,190 1,101,450 113,000 216,240 216,240 329,240 435,130 337,080 2. A cash budget. Show the budget by month and in total. (Cash deficiency, repayments and interest should be indicated by a minus sign.) Answer is complete and correct. Earrings Unlimited Cash Budget For the Three Months Ending June 30 May $ 87,000 $63,942S 255,744 April June Beginning cash balance Add collections from customers Total cash available Less cash disbursements: 87,000 785,4001,225,7001,514,7003,525,800 872,400 1,289,6421.770,444 3,612,800 329,240435,130 337,0801,101,450 330,000330,000330,000 990,000 1,00031,00031,00093,000 132,00032,000 132,000396,000 45,96869,76835,768151,504 3,50013,50013,50040,500 22,50053,00075,500 24.750 932,348 2,872,704 740,096 Rent Salaries Commissions Utilities Dividends paid 24,750 906,458 (34,058) Total cash disbursements 1,033,898 (deficiency) of cash available over 255,744 838,096 Financing 98,000 (98,000) (98,000) (2,9402,940) (2,940) S 63,942 255,744S 737,156 737.156 98,000 Repayments Interest Total financing Ending cash balance 98,000 0 (100,940) 3. A budgeted income statement for the three-month period ending June 30. Use the contribution approach. Answer is complete and correct. Earrings Unlimited Budgeted Income Statement For the Three Months Ended June 30 Sales $3,787,600 Cost of goods sold 1,180,840 151,504 Commissions 1,332,344 2,455,256 Contribution margin Fixed expenses: 990,000 93,000 396,000 81,000 40,500 12,900 Rent Utilities Net operating income Interest expense Net income 1,613.400 841,856 2,940 838,916 4. A budgeted balance sheet as of June 30 Answer is not complete. Earrings Unlimited Budgeted Balance Sheet June 30 Assets Cash Accounts receivable Inventory Prepaid insurance Property and equipment, net 737,156 1,514,700 13,040 14,600 1,155,500 Total assets 3,434,996 Liabilities and Stockholders' Equity Accounts payable, purchases Dividends payable Common stock Retained earnings Total liabilities and stockholders equ