Need help with number 2, 3, 4

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-$12 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) 20,400 26,400 40,400 65,400 100,400 June (budget) July (budget) August (budget) September (budget) 50,400 30,400 28,400 25,400 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 $4.20 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: 4% of sales Variable: Sales commissions Fixed: Advertising Rent Salaries Utilities Insurance Depreciation $ 220,000 $ 20,000 $ 110,000 $ 8,000 $ 3,200 $ 16,000 Insurance is paid on an annual basis, in November of each year. The company plans to purchase $17,000 in new equipment during May and $42,000 in new equipment during June; both purchases will be for cash. The company declares dividends of $16,500 each quarter, payable in the first month of the following quarter. The company's balance sheet as of March 31 is given below: $ 76,000 Assets Cash Accounts receivable ($31,680 February sales; $387,840 March sales) Inventory Prepaid insurance Property and equipment (net) Total assets Liabilities and Stockholders' Equity Accounts payable Dividends payable Common stock Retained earnings Total liabilities and stockholders' equity 419,520 109,872 22,000 970,000 $ 1,597,392 $ 102,000 16,500 840,000 638,892 $ 1,597,392 The company maintains i minimum cash balance of $52,000. 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 $52,000 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 minimum cash balance of $52,000. 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. Reg 1A Reg 1B Reg 10 Reg 1D Reg 2 Req3 Req 4 Prepare a master budget for the three-month period ending June 30 that includes a sales budget, by month and in total. Budgeted unit sales Selling price per unit Total sales Sales Budget April May 65,400 100,400 12 $ 12 $ 784,800 $ 1,204,800 $ June Quarter 50,400 216,200 12 $ 12 604,800 $ 2,594,400 $ $ Reg 1A Req 1B > Reg 1A Reg 1B Req 1C Req 1D Reg 2 Req3 Reg 4 Prepare a master budget for the three-month period ending June 30 that includes a schedule of expected cash collections, by month and in total. February sales March sales April sales May sales June sales Total cash collections Earrings Unlimited Schedule of Expected Cash Collections April May June Quarter $ 31,680 0 0 $ 31,680 339,360 48,480 0 387,840 156,960 549,360 78,480 784,800 0 240,960 843,360 1,084,320 0 0 120,960 120,960 528,000 $ 838,800 $ 1,042,800 $ 2,409,600 Reg 1A Reg 1B Req 1C Req 1D Reg 2 Req3 Reg 4 Prepare a master budget for the three-month period ending June 30 that includes a merchandise purchases budget in units and in dollars. Show the budget by month and in total. (Round unit cost to 2 decimal places.) Earrings Unlimited Merchandise Purchases Budget April May Budgeted unit sales 65,400 100,400 Add: Desired ending merchandise inventory 40,160 20,160 Total needs 105,560 120,560 Less: Beginning merchandise inventory 26,160 40,160 Required purchases 79,400 80,400 Unit cost 4.20 $ 4.20 Required dollar purchases $ 333,480 $ 337,680 June Quarter 50,400 216,200 12,160 12,160 62,560 228,360 20,160 26,160 42,400 202,200 4.20 $ 178.080 $ 849,240 4.20 $ $ Reg 1A Reg 1B Req 1C Req 10 Req 2 Req3 Reg 4 Prepare a master budget for the three-month period ending June 30 that includes a schedule of expected cash disbursements for merchandise purchases, by month and in total. Earrings Unlimited Budgeted Cash Disbursements for Merchandise Purchases April May June Quarter Accounts payable $ 102,000 $ 01 $ 01 $ 102,000 April purchases 166,740 166,740 0 333,480 May purchases 0 168,840 168,840 337,680 June purchases 0 0 89,040 89,040 Total cash payments $ 268,740 $ 335,580 $ 257,880 862,200 Req 1A Reg 1B Req 1C Req 1D Reg 2 Reg 3 Reg 4 Prepare a master budget for the three-month period ending June 30 that includes 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 $52,000. (Cash deficiency, repayments and interest should be indicated by a minus sign.) May June Quarter 838,800 838,800 1,042,800 1,042,800 2,409,600 2,409,600 257.880 862.200 660,000 60,000 Earrings Unlimited Cash Budget For the Three Months Ending June 30 April Beginning cash balance Add collections from customers 528,000 Total cash available 528,000 Less cash disbursements: Merchandise purchases 268,740 Advertising 220,000 Rent 20,000 Salaries 110,000 Commissions 31,392 Utilities 8,000 Equipment purchases 0 Dividends paid 16,500 Total cash disbursements 674.632 Excess (deficiency) of cash available over disbursements (146,632) Financing Borrowings Repayments Interest Total financing Ending cash balance $ (146,632) $ 335,580 220,000 20,000 110,000 48,192 8,000 17,000 0 758,772 80,028 220,000 20,000 110,000 24,192 8,000 42,000 0 682,072 360,728 330,000 103,776 24,000 59,000 16,500 2,115,476 294,124 0 0 0 0 0 0 80,028 $ 360,728 $ 294,124 Reg 1A Req 1B Reg 10 Req 1D Req 2 Req3 Reg 4 Prepare a master budget for the three-month period ending June 30 that includes a budgeted balance sheet as of June 30. Earrings Unlimited Budgeted Balance Sheet June 30 Assets 0 Total assets $ Liabilities and Stockholders' Equity Total liabilities and stockholders' equity 0