PrimeTime Sportswear is a custom imprinter that began operations six months ago. Sales have exceeded management's...

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PrimeTime Sportswear is a custom imprinter that began operations six months ago. Sales have exceeded management's most optimistic projections. Sales are made on account and collected as follows: 50% in the month after the sale is made and 45% in the second month after sale. Merchandise purchases and operating expenses are paid as follows: In the month during which the merchandise is purchased or the cost is incurred In the subsequent month 76% 24% PrimeTime Sportswear's income statement budget for each of the next four months, newly revised to reflect the success of the firm, follows: Sales es Cost of goods sold: Beginning inventory Purchases Cost of goods available for sale Less: Ending inventory Cost of goods sold Gross profit Operating expenses Operating income July $ 42,300 August September $ 53,700 $ 67,800 October $ 58,900 $ 6,270 37,700 $ 14,620 44,000 $ 20,930 $ 58,620 $ 43,970 (14,620) $ 29,350 $ 12,950 10,100 $ 2,850 (20,930) $ 37,690 $ 16,010 12,300 48,500 $ 69,430 (21,710) $ 47,720 $ 20,080 14,400 $ 3,710 $ 5,680 $ 21,710 33,300 $ 55,010 (20,340) $ 34,670 $ 24,230 16,100 $ 8,130 Cash on hand June 30 is estimated to be $39,570. Collections of June 30 accounts receivable were estimated to be $17,650 in July and $14,640 in August. Payments of June 30 accounts payable and accrued expenses in July were estimated to be $24,190. Required: a. 1. Prepare a cash budget for August and September. 2. What are the prospects for this company if its sales growth continues at a similar rate? PrimeTime Sportswear is a custom imprinter that began operations six months ago. Sales have exceeded management's most optimistic projections. Sales are made on account and collected as follows: 50% in the month after the sale is made and 45% in the second month after sale. Merchandise purchases and operating expenses are paid as follows: In the month during which the merchandise is purchased or the cost is incurred In the subsequent month 76% 24% PrimeTime Sportswear's income statement budget for each of the next four months, newly revised to reflect the success of the firm, follows: Sales es Cost of goods sold: Beginning inventory Purchases Cost of goods available for sale Less: Ending inventory Cost of goods sold Gross profit Operating expenses Operating income July $ 42,300 August September $ 53,700 $ 67,800 October $ 58,900 $ 6,270 37,700 $ 14,620 44,000 $ 20,930 $ 58,620 $ 43,970 (14,620) $ 29,350 $ 12,950 10,100 $ 2,850 (20,930) $ 37,690 $ 16,010 12,300 48,500 $ 69,430 (21,710) $ 47,720 $ 20,080 14,400 $ 3,710 $ 5,680 $ 21,710 33,300 $ 55,010 (20,340) $ 34,670 $ 24,230 16,100 $ 8,130 Cash on hand June 30 is estimated to be $39,570. Collections of June 30 accounts receivable were estimated to be $17,650 in July and $14,640 in August. Payments of June 30 accounts payable and accrued expenses in July were estimated to be $24,190. Required: a. 1. Prepare a cash budget for August and September. 2. What are the prospects for this company if its sales growth continues at a similar rate?