50.1K

Verified Solution

Link Copied!

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 In the subsequent month 78% 22% PrimeTime Sportswear's income statement budget for each of the next four months, newly revised to reflect the success of the firm, follows: September $ 41,000 October $ 54,500 November $ 68,000 December $ 59,000 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 $ 5,830 38,200 $ 44,030 (14,770) $ 29, 260 $ 11,740 10,600 $ 1,140 $ 14,770 43,800 $ 58,570 (20,540) $ 38,030 $ 16,470 12,400 $ 4,070 $ 20,540 49,400 $ 69,940 (21,740) $ 48,200 $ 19,800 14,000 $ 5,800 $ 21,740 32,600 $ 54,340 (20,400) $ 33,940 $ 25,060 16,300 $ 8,760 Cash on hand August 31 is estimated to be $40,350. Collections of August 31 accounts receivable were estimated to be $19,940 in September and $14,570 in October. Payments of August 31 accounts payable and accrued expenses in September were estimated to be $24,250. Required: a. Prepare a cash budget for September. September Beginning cash Cash receipts: Total cash receipts Cash disbursements: Total cash disbursements Ending cash

Answer & Explanation Solved by verified expert

See Answer