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: $51\%$ in the month after the sale is made and $46\%$ 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 $71\%$

In the subsequent month $29\%$

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 $$39,600.$ Collections of June $30$ accounts receivable were estimated to be $$17,350$ in July

and $$15,130$ in August. Payments of June $30$ accounts payable and accrued expenses in July were estimated to be $$24,020.$

Required:

a$.1.$ 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$.1.$ Assume now that PrimeTime Sportswear is a mature firm, and that the July to 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.

Can the cash budget be used to support a request to a bank for a seasonal loan?

Complete this question by entering your answers in the tabs below.

Required A$1$

Prepare a cash budget for August and September.

Note: Beginning cash should be indicated with a minus sign if it is a negative amount.