Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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 788 228 PrimeTime Sportswear's income statement budget for each of the next four months, newly revised to reflect the success of the firm, follows: September $ 42,500 October $ 54,200 November $ 67, 700 December $ 59,300 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 $ 5,640 37, 700 $ 43, 340 (14, 180) $ 29,160 $ 13,340 10,100 $ 3,240 $ 14,180 44,200 $ 58,380 (20,340) $ 38,040 $ 16,160 12,400 $ 3,760 $ 20,340 48,600 $ 68,940 (21, 790) $ 47,150 $ 20,550 14,700 $ 5,850 $ 21,790 32,800 $ 54,590 (20, 340) $ 34,250 $ 25,050 15,900 $ 9, 150 Cash on hand August 31 is estimated to be $40,200. Collections of August 31 accounts receivable were estimated to be $17,690 in September and $14,870 in October. Payments of August 31 accounts payable and accrued expenses in September were estimated to be $24,140. Required: 2-1. Prepare a cash budget for October and November. (Beginning cash should be indicated with a minus sign if it is a negative amount.) be $24,140. 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.) October November Beginning cash Cash receipts August 31 accounts receivable September sales TOctober 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 b-1. Assume now that PrimeTime 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.) December January February 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
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started