5. Given the following information, how much of a line of credit is appropriate? (Beckie's

Toy Manufacturer 2004 Cash Budget for SEPT NOV in $1,000,000s). One half 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.

Sales 200 240 290 300

Purchases 200 275 400 500

AUG SEPT OCT NOV

Cash Inflows x

Cash Sales 120

Collect AR 100

Other 20 20 500

Total 240

Cash Outflows

Cash Purchases 192.5

Pay AP 60

Other 40 40 40

Total 292.5

Net Cash Flow

Beg Bal. 30

End Bal.

Required (30)

Surp(Loan) ________ _____________________________________

Line of Credit of__________________