PrimeTime Sportswear: Prepare a cash budget
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See attached file for the tables.
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 $39,620. Collections of June 30 accounts receivable were estimated to be $20,420 in July and $15,280 in August. Payments of June 30 accounts payable and accrued expenses in July were estimated to be $23,820.
(a) Prepare a cash budget for August and September. (Enter all amounts as positive value except for Beginning Ending cash which has to be indicated with a minus sign if it is negative amount. Leave no cells blank - be certain to enter "0" wherever required.)
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Solution Summary
The expert prepares a cash budget for PrimeTime Sportswear.
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See attached file for formulas.
answer
july august sep oct
sales 42400 54200 67600 59100
first month 20420 21200 27100 33800
second month 15280 19080 24390 30420
total cash ...
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