roblerCash budget-part 1 Prime Time Sportswear is a custom imprinter that began operations six months ago. Sales 4.21 have exceeded management's most optimistic projections. Sales are made on account and collected as follows: O 14-4,60% in the month after the sale is made and 35% in the second month after sale. Merchandise purchases and 4-7 operating expenses are paid as follows: In the month during which the merchandise is purchased or the cost is incurred In the subsequent month... 70% 30% Prime Time Sportswear's income statement budget for each of the next four months, newly revised to reflect the success of the firm, follows: Sales July $84,000 August $108,000 September $136,000 October $118,000 Cost of goods sold: Beginning inventory $12,000 Purchases 75,600 Cost of goods available for sale $87,600 $ 28,800 88,000 $116,800 $ 41,200 $ 43,800 Less: Ending inventory (28,800) (41,200) Cost of goods sold $58,800 Gross profit Operating expenses $25,200 21,000 $ 75,600 $ 32,400 25,600 $ 95,200 $ 40,800 28,600 Operating income $ 4,200 $ 6,800 $ 12,200 97,800 $139,000 (43,800) 66,200 $110,000 (40,000) $ 70,000 $ 48000 32,200 $ 15,800 Cash on hand June 30 is estimated to be $75,000. Collections of June 30 accounts receivable were estimated to be $40,000 in July and $30,000 in August. Payments of June 30 accounts payable and accrued expenses in July Cash on hand June 30 is estimated to be $75,000. Collections of June 30 accounts receivable were estimated to be $40,000 in July and $30,000 in August. Payments of June 30 accounts payable and accrued expenses in July were estimated to be $48,000. Required: a. Prepare a cash budget for July. b. What is your advice to management of Prime Time Sportswear? Problem ash budget-part 2 Refer to the PrimeTime Sportswear data presented in Problem 14.21. 4.22 O 14-4,Required: 4-7 a. 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. Assume now that Prime Time Sportswear is a mature firm and that the July-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. Explain how the cash budget would be used to support a request to a bank for a seasonal loan. ProblerCash budget The monthly cash budgets for the second quarter of 2022 follow (5000 omitted) for Tuscano Mfg. 14.23 Co. A minimum cash balance of $15,000 is required to start each month, and a $50,000 line of credit has been LO 14-7 arranged with a local bank at a 16% interest rate. Required: page January February March Total Cash balance, beginning. Add collections from customers Total cash available $13 $? $? $ 13 ? 54 ? ? $ 47 $? $83 $169 Less disbursements: Purchase of inventory $? $ 30 $ 24 $? Operating expenses 15 ? Capital additions 17 4 ?? ? 22 Payment of dividends ? 4 Total disbursements $? $ 54 $ 41 $152 Excess (deficiency) of cash available over disbursements $(10) $? $ 42 $? Borrowings.... ? Repayments (including interest) Cash balance, ending... ? $? $ 15 $? $ 16 ??? Calculate the missing amounts. (Hint: The total cash available includes collections from customers for all three months, plus the beginning cash balance from January 1, 2022.)