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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
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 77% 23% PrimeTime Sportswear's income statement budget for each of the next four months, newly revised to reflect the success of the firm, follows: September $ 41,600 October | 53,600 November $ 68,300 December $ 58,600 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 $ 6,320 37,500 $ 43,820 (14,310) $ 29,510 $ 12,090 10,700 $ 1,390 $ 14,310 44,200 $ 58,510 (20,210) $ 38,300 $ 15,300 13,300 $ 2,000 $ 20,210 48,900 $ 69, 110 (22,420) $ 46,690 $ 21,610 14,200 $ 7,410 $ 22,420 33,300 $ 55,720 (20,000) $ 35,720 $ 22,880 16,500 $ 6,380 Cash on hand August 31 is estimated to be $40,290. Collections of August 31 accounts receivable were estimated to be $19,760 in September and $14,670 in October. Payments of August 31 accounts payable and accrued expenses in September were estimated to be $24,490. Required: a. Prepare a cash budget for September. September Beginning cash Cash receipts: Total cash receipts 0 Cash disbursements: Total cash disbursements $ 0 Ending cash $ 0 b. What is your advice to management of PrimeTime Sportswear? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) ? Secure more finance through sale of bonds ? Accelerate the collection of accounts receivable ? Slow down the collection of accounts receivable ? Accelerate the payments of accounts payable ? Slow down the payment of accounts payable
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