D Chapter 14 . HW#2 × . M Check Your Work-Google Chrome ezto.mheducation.com/hm.

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D Chapter 14 . HW#2 × . M Check Your Work-Google Chrome ezto.mheducation.com/hm.tpx LOGIN Prime Time 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 folows, 49% in the month after the sale is made and 44% in the second month arter 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 s 75% 25% ent month Prime Time Sportswears income statement budget for each of the next four months, newly revised to reflect the success of the firm, follows December Sales Cost of goods sold 41.200 54200 68000S59 200 $5,710$ 14,860 $ 21.080 S 21.510 Beginning inventory 38 400 44,11 Purchases 43 700 49 400 Cost of goods available for sale Less Ending inventory Cost of goods sold (14 860)21 080) 21510)19 980) 430 250 480 $ 48.970 Gross prof A,77 1450015700 1450 3,820 4,530$ 9,070 Operating expenses Operating income am a cash bu Cash on hand August 31 is estimated to be $39,990 Collections of August 31 accounts receivable were estimated to be $20,080 in September and $15,070 in October. Payments of August 31 accounts payable and accrued expenses in September were estimated to be $24 150 Required: a-1. Prepare a cash budget for October and Novermber (Beginning cash should be indicated with a minus sign if it is a negative amount.) 8 Answer is complete but not entirely correct.

Explanation / Answer

Cash Budget

Cash Budget September October November Op Balance                           39,990 -755 -20172 Receipts Collections-Aug 20080 15070 Collections-Sep 20188 18128 Collections-Oct 26558 Collections-Nov TOTAL A                           60,070                        34,503                       24,514 Payments Purchase-Aug 24150 Purchase-Sep 28800 9600 Purchase-Oct 32775 10925 Purchase-Nov 37050 operating Exp-Aug operating Exp-Sep 7875 2625 operating Exp-Oct 9675 3225 operating Exp-Nov 10875 TOTAL B 60825 54675 62075 Closing Balance A-B                              (755)                      (20,172)                     (37,561)

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