Adjust the Cash Balance We obtain the following 2018 forecasts of selected financial statement line items for Journey Company.

$ millions	2017 Actual	2018 Est.
Net Sales	$688,555	$720,440
Marketable securities	67,096	62,096
Long-term debt	346,558	308,437
Treasury stock (deducted from equity)	51,174	51,174
Cash generated by operations		57,585
Cash used for investing		(14,797)
Cash used for financing		(54,771)
Total net change in cash		(11,983)
Cash at beginning of period		51,141
Cash at end of period		$39,158

a. Does forecasted cash deviate from the normal level for this company? Calculate the company's normal cash level as a percentage of sales. Round answer to one decimal place. Answer

% Using the rounded answer above, compute what should be the normal cash balance for FY2018. Round answer to the nearest million. $Answer

million b. Is the deviation in part a large enough to require adjustment? Explain.

No. the deviation is not large enough to require an adjustment.

Yes, the deviation is large enough to require an adjustment.

c. Identify three ways to adjust the forecasted cash balance. Which option would least likely be used to adjust the cash balance?

Sell marketable securities

Decrease capital expenditures

Increase long-term debt

Sell treasury stock

d. Fill in the blanks in the following statement of cash flows assuming long-term debt is used to adjust the forecasted cash balance.

Use negative signs with answers, when appropriate.

Cash generated by operations				$Answer
Cash used for investing				Answer
Cash used for financing				Answer
Total change in cash				Answer
Cash at beginning of period				Answer
Cash at end of period				$Answer

e. Fill in the blanks in the following statement of cash flows assuming marketable securities are used to adjust the forecasted cash balance.

Use negative signs with answers, when appropriate.

Cash generated by operations				$Answer
Cash used for investing				Answer
Cash used for financing				Answer
Total change in cash				Answer
Cash at beginning of period				Answer
Cash at end of period				$Answer