2.Given the following information, how much of a line of credit is appropriate? (Jackie's Toy Manufacturer 2005 Cash Budget for SEPT NOV in $1,000,000s). Thirty percent of sales are for cash and the balance is collected the month following the sales. Seventy percent of the purchases are for cash and the balance is paid the month following the purchase. The required balance is 50.

Sales 400 500 800 1,000

Purchases 250 375 500 600

AUG SEPT OCT NOV

Cash Inflows: x

Cash Sales x 150 240 300

Collect AR x 280 350 ___ (FILL IN)

Other x 70 80 1,500

Total Cash Inflows 500 670 ___ (FILL IN)

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Cash Outflows: x

Cash Purchases x 262.5 350 420

Pay AP x 75. ___ ___ (FILL IN)

Other x 140 150 155

Asset Purchase 500 x x

Total Cash Outflows 977.5 ___ ___ (FILL IN)

NET CASH FLOW -477.5 ___ ___ (FILL IN)

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Beg Bal. 50

End Bal. ___ ___ ___ (FILL IN)

R_________ ___ ___ ___ (FILL IN)

Surp(Loan) _____________________________________________

1. Line of Credit or loan needed is $__________________________.