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 74% In the subsequent month 26% PrimeTime Sportswear's income statement budget for each of the next four months, newly revised to reflect the success of the firm, follows: July August September October Sales $ 42,800 $ 54,000 $ 68,100 $ 58,700 Cost of goods sold: Beginning inventory $ 6,200 $ 14,550 $ 20,990 $ 22,360 Purchases 37,200 43,800 48,600 32,800 Cost of goods available for sale $ 43,400 $ 58,350 $ 69,590 $ 55,160 Less: Ending inventory (14,550) (20,990) (22,360) (19,630) Cost of goods sold $ 28,850 $ 37,360 $ 47,230 $ 35,530 Gross profit $ 13,950 $ 16,640 $ 20,870 $ 23,170 Operating expenses 10,300 12,900 14,900 16,400 Operating income $ 3,650 $ 3,740 $ 5,970 $ 6,770 Cash on hand June 30 is estimated to be $40,430. Collections of June 30 accounts receivable were estimated to be $16,680 in July and $14,990 in August. Payments of June 30 accounts payable and accrued expenses in July were estimated to be $24,350. Required: Prepare a cash budget for August and September. What are the prospects for this company if its sales growth continues at a similar rate? 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?