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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 78% In the subsequent month 22% 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 $40,240. Collections of June 30 accounts receivable were estimated to be $16,670 in July and $15,310 in August. Payments of June 30 accounts payable and accrued expenses in July were estimated to be $24,180. Required: a. 1. Prepare a cash budget for August and September. 2. 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. 2. Can the cash budget be used to support a request to a bank for a seasonal loan? Prepare a cash budget for August and September. Note: Beginning cash should be indicated with a minus sign if it is a negative amount. 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 ousiness. Prepare a cash budget for October, November, and December, assuming that the income statements for November and December are the same as October's. Note: Beginning cash should be indicated with a minus sign if it is a negative amount. Can the cash budget be used to support a request to a bank for a seasonal loan

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