Mellon's total sales for each month were first calculated in the sales budgetand are reflected on the first line of the cash budget. Mellon's sales are made on credit with terms of 2/10, net 30, Mellon's experience is that 25% is collected from customers 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 45% of Mellon's finished product. The purchases are generally made one month in advance of the sale, and Mellon pays its suppliers in 30 days. Accordingly, if July sales are forecasted at $1,320 million, then purchases during June would be $594 ($1,320 million x 0.45), and this amount would be paid in Juhy * Other cash expenses indude wages and salaries at 15% of sales, monthly rent of $48 million, and other expenses at 5% of sales. Estimated tax payments of $70 million and $73 million are required to be paid on July 15 and October 15, respectively. In addition, a $1,200 million payment for a new plant must be made in September .Assume that Mellon's targeted cash balance is $300, and the estimated cash on hand on July 1 is $343 Use the preceding information to fil in the missing amounts in the following cash budget Mellon Company Cash Budget For the Six Months Ended December 31, Year 1 ($ millions) Jul August September $1,236 567 August September October November $1,296 594 October November December June $1,176 540 $1,260 583 Credit sales $1,140 $1,200 $1,212 556 $1,320 Credit purchases 545 July December Cash receipts Collections from this month's sales Collection Collections from sales two months previously 294 764 114 $1,172 297 780 118 $1,195 303 788 120 $1,211 309 803 121 $1,233 318 819 124 $1,261 323 842 126 $1,291 s from previous month's sales Total cash receipts Payments for credit purchases Wages and salaries 540 180 48 60 70 545 182 48 61 556 185 48 583 194 48 65 594 198 48 Other expenses Payment for plant construction Total cash disbursements 1,200 $2,051 $898 $836 $890 5906