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: 49% in the month after the sale is made and 44% 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 79% 21% Prime Time Sportswear's income statement budget for each of the next four months, newly revised to reflect the success of the firm, follows: September October November December Sales $42,000 $ 54,500 $68,000 $59,100 Cost of goods sold: Beginning inventory $ 6.030 $14,350 |$20,260 $21,770 Purchases 37.800 | 4,400 48,500 | 32,600 Cost of goods available for sale $43,830 $58,750 $68,760 $54,370 Less: Ending inventory (14,3500) | (20,260) | (21,770) (19,900) Cost of goods sold $29.480 |$ 38.490 $46,990 | $34,470 _ Gross profit $12.520 $16,010 $21,010 $24,630 Operating expenses | 10,900, | 13,2001 14,300 , 16,500, Operating income $ 1,620 $ 2,810 $ 6,710 | $ 8.130 Cash on hand August 31 is estimated to be $39.680. Collections of August 31 accounts receivable were estimated to be $20,140 in September and S14,510 in October. Payments of August 31 accounts payable and accrued expenses in September were estimated to be $24,180. 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: 49% in the month after the sale is made and 44% 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 79% 21% Prime Time Sportswear's income statement budget for each of the next four months, newly revised to reflect the success of the firm, follows: September October November December Sales $42,000 $ 54,500 $68,000 $59,100 Cost of goods sold: Beginning inventory $ 6.030 $14,350 |$20,260 $21,770 Purchases 37.800 | 4,400 48,500 | 32,600 Cost of goods available for sale $43,830 $58,750 $68,760 $54,370 Less: Ending inventory (14,3500) | (20,260) | (21,770) (19,900) Cost of goods sold $29.480 |$ 38.490 $46,990 | $34,470 _ Gross profit $12.520 $16,010 $21,010 $24,630 Operating expenses | 10,900, | 13,2001 14,300 , 16,500, Operating income $ 1,620 $ 2,810 $ 6,710 | $ 8.130 Cash on hand August 31 is estimated to be $39.680. Collections of August 31 accounts receivable were estimated to be $20,140 in September and S14,510 in October. Payments of August 31 accounts payable and accrued expenses in September were estimated to be $24,180
