Wickford 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: Wickford's total sales for each month were first calculated 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 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 55% 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. Accordingly, if July sales are forecasted at $1,320 million, then purchases during June would be $726 ($1,320 million x 0.55), and this amount would be paid in July. Other cash expenses include wages and salaries at 17% 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 Wickford's targeted cash balance is $200, and the estimated cash on hand on July 1 is $192. Use the preceding information to fill in the missing amounts in the following cash budget. Use the preceding information to fill in the missing amounts in the following cash budget. Wickford Company Cash Budget For the Six Months Ended December 31, Year 1 ($ millions) May $1,140 June $1,176 660 July $1,200 Credit sales Credit purchases August September $1,212 $1,236 680 693 October $1,260 713 November $1,296 726 December $1,320 July August September October November December 323 Cash receipts Collections from this month's sales Collections from previous month's sales Collections from sales two months previously Total cash receipts 842 297 780 118 $1,195 303 788 120 $1,211 309 803 121 $1,233 318 819 124 $1,261 126 $1,291 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 1,200 $2,200 $1,042 $982 $1,046 $1,064 $130 192 -$989 535 $142 -454 $322 200 $213 322 $535 200 $335 -$312 200 -$512 $215 -312 -$97 200 -$297 $227 -97 $130 200 -$70 $122 Use the information provided in the budget to complete the following sentences. Wickford 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, Wickford will to end the year with a cash of $ and a cash of $ . Wickford 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