Prime Time Sportswear is a custom imprinter that began operations six months ago. Sales have exceeded...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Prime Time 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 Prime Time Sportswear's income statement budget for each of the next four months, newly revised to reflect the success of the firm, follows: Sales 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 September $ 42,000 $ 6,000 37,800 $43,800 (14,400) $ 29,400 $ 12,600 10,500 $ 2,100 October $ 54,000 $ 14,400 44,000 $ 58,400 (20,600) $ 37,800 $ 16,200 12,800 $ 3,400 November $ 68,000 $ 20,600 48,900 $ 69,500 (21,900) $ 47,600 75% 25% $ 20,400 14,300 $ 6,100 December $ 59,000 $ 21,900 33,100 $ 55,000 (20,000) $ 35,000 $ 24,000 16,100 $ 7,900 Cash on hand August 31 is estimated to be $40,000. Collections of August 31 accounts receivable were estimated to be $20,000 in September and $15,000 in October. Payments of August 31 accounts payable and accrued expenses in September were estimated to be $24,000. Required: a-1. Prepare a cash budget for October and November. (Beginning cash should be indicated with a minus sign if it is a negative amount.) Beginning cash Cash receipts: August 31 accounts receivable September sales October sales November sales Total cash receipts Cash disbursements: September purchases October purchases November purchases September operating expenses October operating expenses November operating expenses Total cash disbursements Ending cash October November a-2. What are the prospects for this company if its sales growth continues at a similar rate? Prospects are good Prospects are not good b-1. Assume now that Prime Time Sportswear is a mature firm, and that the September-November data represent a seasonal peak in business. Prepare a cash budget for December, January, and February, assuming that the income statements for January and February are the same as December's. (Beginning cash should be indicated with a minus sign if it is a negative amount.) Beginning cash Cash receipts: October sales November sales December sales January sales Total cash receipts Cash disbursements: November purchases December purchases January purchases February purchases November operating expenses December operating expenses January operating expenses February operating expenses Total cash disbursements Ending cash December January February Prime Time 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 Prime Time Sportswear's income statement budget for each of the next four months, newly revised to reflect the success of the firm, follows: Sales 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 September $ 42,000 $ 6,000 37,800 $43,800 (14,400) $ 29,400 $ 12,600 10,500 $ 2,100 October $ 54,000 $ 14,400 44,000 $ 58,400 (20,600) $ 37,800 $ 16,200 12,800 $ 3,400 November $ 68,000 $ 20,600 48,900 $ 69,500 (21,900) $ 47,600 75% 25% $ 20,400 14,300 $ 6,100 December $ 59,000 $ 21,900 33,100 $ 55,000 (20,000) $ 35,000 $ 24,000 16,100 $ 7,900 Cash on hand August 31 is estimated to be $40,000. Collections of August 31 accounts receivable were estimated to be $20,000 in September and $15,000 in October. Payments of August 31 accounts payable and accrued expenses in September were estimated to be $24,000. Required: a-1. Prepare a cash budget for October and November. (Beginning cash should be indicated with a minus sign if it is a negative amount.) Beginning cash Cash receipts: August 31 accounts receivable September sales October sales November sales Total cash receipts Cash disbursements: September purchases October purchases November purchases September operating expenses October operating expenses November operating expenses Total cash disbursements Ending cash October November a-2. What are the prospects for this company if its sales growth continues at a similar rate? Prospects are good Prospects are not good b-1. Assume now that Prime Time Sportswear is a mature firm, and that the September-November data represent a seasonal peak in business. Prepare a cash budget for December, January, and February, assuming that the income statements for January and February are the same as December's. (Beginning cash should be indicated with a minus sign if it is a negative amount.) Beginning cash Cash receipts: October sales November sales December sales January sales Total cash receipts Cash disbursements: November purchases December purchases January purchases February purchases November operating expenses December operating expenses January operating expenses February operating expenses Total cash disbursements Ending cash December January February
Expert Answer:
Answer rating: 100% (QA)
Answer a1 Cash budget for SeptemberOctober and November September October November Beginning Cash 40... View the full answer
Related Book For
Accounting What the Numbers Mean
ISBN: 978-1259535314
11th edition
Authors: David Marshall, Wayne McManus, Daniel Viele
Posted Date:
Students also viewed these finance questions
-
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: 60%...
-
Cash budget. PrimeTime Sportswear is a custom imprinter that began operations six months ago. Sales have exceeded managements most optimistic projections. Sales are made on account and collected as...
-
Prime Time 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%...
-
I currently have to complete an assignment on normalization anddenormalization, but I'm lost and don't know hat to do! General Instructions You must answer the following questions and create a...
-
The following partnership is being liquidated: a. Liquidation expenses are estimated to be $12,000. Prepare a predistribution schedule to guide the distribution of cash. b. Assume that assets costing...
-
Suppose that in 2010, Global launched an aggressive marketing campaign that boosted sales by 15%. However, their operating margin fell from 5.57% to 4.50%. Suppose that they had no other income,...
-
Show that during the early part of the electron-positron annihilation era, the ratio of the electron number density to the photon number density scaled with temperature as \[\frac{n_{-}}{n_{\gamma}}...
-
Rottino Company purchased a new machine on October 1, 2017, at a cost of $150,000. The company estimated that the machine will have a salvage value of $12,000. The machine is expected to be used for...
-
Ports should also be able to adapt to global and regional political or social changes. Historically, it is apparent that unexpected sociopolitical developments have demanded ports to change their...
-
Benetton has entered into a quantity flexibility contract for a seasonal product with its retailer. If the retailer orders O units, Benetton is willing to provide up to another 35 percent if needed....
-
In an effort to improve their services, the Department of Motor Vehicles times how long, in minutes, it takes to serve each applicant. The manager of a facility takes five measurements each day, for...
-
Research on a current social issue related to Barriers of Communication that bothers you. It can be situated in any country. The usual tenets of journalism must be observed: truth-telling, fairness,...
-
It is hoped you have gained an appreciation for the complexities of human communications. Though, in some ways simplifying communication, technology has also added to those complexities. Based on all...
-
Hannah's organization is implementing a new approach to user authentication that relies upon SAML. She would like to protect against eavesdropping on this traffic and also ensure that SAML traffic is...
-
Compute the c 32 element in the matrix, C, by the following matrix addition: C = 2A + 3B. A = 8 4 -3 3 -2 -2 6 9 9 9 7 -2 B = 4 -2 -7 2 -6 2 9 -2 7 2 9 -9
-
1. Bert And Ernie Walk Into A Donut Shop Where There Are 10 Different Flavors Of Donut Available. Each One Independently Chooses Three Different Flavors At Random. (I) Find The Expected Number Of...
-
The Thompson family has come to you for advice on life insurance cover to protect their family. Bob Thompson, aged 48, has only ever been an artist and his spouse, Zara, aged 41, is a hairdresser....
-
Consider the function f and its graph. a. Estimate the zeros of the area function b. Estimate the points (if any) at which A has a local maximum or minimum. c. Sketch a graph of A, for 0 x 10,...
-
Larry estimates that the costs of insurance, license, and depreciation to operate his car total $320 per month and that the gas. Oil, and maintenance costs are 14 cents per mile. Larry also estimates...
-
Gary's TV had the following accounts and amounts in its financial statements on December 31, 2016. Assume that all balance sheet items reflect account balances at December 31. 2016, and that all...
-
The following is a portion of the current assets section of the balance sheets of Avanti's. Inc. at December 31. 2017 and 2016: Required: a. If $23,600 of accounts receivable were written off during...
-
Fill in the blanks to make the following statements correct. a. Economists have designed____________ to better explain and predict the behaviour we observe in the world around us. b. A variable, such...
-
The following supply and demand schedules describe a hypothetical Canadian market for potash. a. What is the equilibrium price of potash? b. How much potash would actually be purchased if the price...
-
According to Statistics Canada, Canada's exports and imports of energy (combined totals of fossil fuels, hydro, and nuclear, all measured in petajoules) over a five-year period were as follows: a....
Study smarter with the SolutionInn App