Question Problem $14\mathrm{.}22$ Cash budget$$part $2$ Refer to the PrimeTime Sportswear data presented in Problem $14\mathrm{.}21.$ Required: a$.$ Prepare a cash budget for August and September. What are the prospects for this company if its sales growth continues at a similar rate? b$.$ Assume now that PrimeTime Sportswear is a mature firm and that the July$$September data represent a seasonal peak in business. Prepare a cash budget for October, November, and December, assuming that the income statements for November and December are the same as October$$s$.$ Explain how the cash budget would be used to support a request to a bank for a seasonal loan.

Problem $14\mathrm{.}21($previously worked by expert$)$ Question

$$Problem Cash budget$-$part $1$PrimeTime Sportswear is a custom imprinter that began operations six months ago. Sales have exceeded management's $14\mathrm{.}21$most optimistic projections. Sales are made on account and collected as follows: $\backslash (60\backslash \%\backslash )$in the month after the sale is made and $\backslash (35\backslash \%\backslash )$in the second LO $14-4,$month after sale. Merchandise purchases and operating expenses are paid as follows:

PrimeTime Sportswear's income statement budget for each of the next four months, newly revised to reflect the success of the firm, follows:

Cash on hand June $30$is estimated to be $\backslash (\backslash$$ $75,000\backslash ).$Collections of June $30$accounts receivable were estimated to be $\backslash (\backslash$$ $40,000\backslash )$in July and $\backslash (\backslash$$ $30,000\backslash )$in August. Payments of June $30$accounts payable and accrued expenses in July were estimated to be $\backslash (\backslash$$ $48,000\backslash ).$

Required:

a$.$Prepare a cash budget for July.

b$.$What is your advice to management of PrimeTime Sportswear?