Jamison Company's financial managers are meeting with the company's bank to renew their line of credit and discuss their investment needs. They have prepared the company's operating cash budget for the last six months of the year. The following budget assumptions were used to construct the budget: Jamison's total sales for each month were first calculated in the sales budget and are reflected on the first line of the cash budget. Jamison's sales are made on credit with terms of 2/10, net 30. Jamison's experience is that 20% is collected from customers who take advantage of the discount, 70% 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 Jamison's finished product. The purchases are generally made one month in advance of the sale, and Jamison pays suppliers in 30 days. Accordingly, if July sales are forecasted at $1,100 million, then purchases during June would be $550 ($1,100 million x 0.50), and this amount would be paid in July. Other cash expenses include wages and salaries at 15% of sales, monthly rent of $40 million, and other expenses at 5% of sales. Estimated tax payments of $59 million 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 Jamison's targeted cash balance is $200, and the estimated cash on hand on July 1 is $241. Use the preceding information to fill in the missing amounts in the following cash budget. Jamison Company Cash Budget For the Six Months Ended December 31, Year 1 ($ millions) June July October December May $950 $1,000 November $1,080 August $1,010 515 Credit sales Credit purchases September $1,030 525 $980 500 $1,100 $1,050 540 550 July August September October November December 206 212 Cash receipts Collections from this month's sales Collections from previous month's sales Collections from sales two months previously Total cash receipts 198 700 202 707 100 216 756 721 735 98 101 103 105 $996 $1,009 $1,028 $1,050 $1,077 500 505 540 550 515 155 ID 150 152 162 165 40 40 40 40 40 50 51 52 54 55 59 Cash disbursements Payments for credit purchases Wages and salaries Rent Other expenses Taxes Payment for plant construction Total cash disbursements Net cash flow (Receipts - disbursements) Beginning cash balance Ending cash balance Target (minimum) cash balance Surplus (shortfall) cash 1,000 $1,762 $799 $748 $796 $810 $248 $191 $254 $178 241 - $753 667 $267 359 419 -86 105 $419 200 $667 200 $467 MI $105 200 $359 200 $626 200 $426 $219 -$95 $159 Use the information provided in the budget to complete the following sentences. Jamison Company will be able to invest in short-term marketable securities in some months and will need to borrow to cover cash requirements in others. In the last six months of the year, Jamison will $ to end the year with a cash of $ and a cash of $ Jamison Company will want a credit line of at least $ to cover the month with the greatest shortfall, and the financial managers can tell the bank to expect that they will be able to invest up to $ in short-term marketable securities