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: 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 80% 20% PrimeTime 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 September $ 42,700 October $ 54,200 November $ 68,000 December $ 58,900 $ 6,130 38,100 Cost of goods available for sale. Less: Ending inventory Cost of goods sold Gross profit Operating expenses Operating income $ 44,230 (14,190) $ 30,040 $ 12,660 10,100 $ 14,190 43,800 $ 57,990 (21,040) $ 36,950 $ 17,250 12,500 $ 69,640 (22,490) $ 47,150 $ 20,850 14,200 $ 2,560 $ 4,750 $ 6,650 $ 22,490 32,900 $ 55,390 (19,640) $ 35,750 $ 23,150 15,800 $ 7,350 $ 21,040 48,600 Cash on hand August 31 is estimated to be $40,200. Collections of August 31 accounts receivable were estimated to be $19,720 in September and $14,800 in October. Payments of August 31 accounts payable and accrued expenses in September were estimated to be $24,380.