6. Cash budget Aa Aa wickford company's financial managers are meeting with the company's bank to renew their line of credit and disoss their investment needs. They have prepared the company's operating cash budget for the last six months ofthe year The following budget assumptions wereused toconstruct the budget: wickford's total sales for each month werefirst calaulated in the sales budget and are reflected on the first line of the cash budget. wickford's sales are made on credit with terms of 2/10, net 30 wickford's experience is that 25% is collected from austomers who take advantage of the discount, 65% is collected in the second month, and the last 10% is collected in the third month after the sale. The budget assumes that there are no bad debts. The cost of materials averages 50% of wickford's finished product. The purchases are generally made one month in advance of the sale, and wickford pays its suppliers in 30 days. Aooordingly, if July sales are forecasted at $1,100 million, then purchases during June would be ssso ($1,10o million xo.so),and this amount would be paid in July other cash expenses indude wages and salaries at 18% of sales, monthly rent of s40 million, and other expenses at 5% of sales. Estimated tax payments of $59 on and $61 million are required to be paid on July 15 and october 15, respectively. In addition, a $1,000 million payment for a new plant must be made in September. Assume that wickford's targeted cash balance is $200, and the estimated cash on hand on July 1 is $210. use the preceding information to fill in the missing amounts in the following cash budget