- Mellon Company S Financial Managers Are Meeting With The Company S Bank To Renew Their Line Of Credit And Discuss Their 1 (38.62 KiB) Viewed 35 times
- Mellon Company S Financial Managers Are Meeting With The Company S Bank To Renew Their Line Of Credit And Discuss Their 2 (39.85 KiB) Viewed 35 times
- Mellon Company S Financial Managers Are Meeting With The Company S Bank To Renew Their Line Of Credit And Discuss Their 3 (35.06 KiB) Viewed 35 times
- Mellon Company S Financial Managers Are Meeting With The Company S Bank To Renew Their Line Of Credit And Discuss Their 4 (29.99 KiB) Viewed 35 times
- Mellon Company S Financial Managers Are Meeting With The Company S Bank To Renew Their Line Of Credit And Discuss Their 5 (29.99 KiB) Viewed 35 times
- Mellon Company S Financial Managers Are Meeting With The Company S Bank To Renew Their Line Of Credit And Discuss Their 6 (32.98 KiB) Viewed 35 times
- Mellon Company S Financial Managers Are Meeting With The Company S Bank To Renew Their Line Of Credit And Discuss Their 7 (32.61 KiB) Viewed 35 times
May Jun Jul Aug Sep Oct Nov Der Credit sales $85.50 $88.20 $90.00 $90.90 $99.00 $92.70 51.98 $94.50 53 46 $97.20 54.45 Credit purchases 49.50 $0.99 Jul Aug Sep Oct Nov Dec Cash receipts Collections from this month's sales $13.36 $13.63 $13.89 $14.29 $14.55 67 50 68.18 69.53 70.88 72.90 Collections from previous month's sales Collections from sales two months previously 8.82 9.00 9.09 9.27 9.45 $89.68 $90.81 $92.51 $94.44 $96.90 $49.50 $50.00 $10.99 $53.46 $54.45 16.10 14,54 14.80 15.55 15.30 Total cash receipts Cash disbursements Payments for credit purchases Wages and salones Rent Other expenses Taxes Payment for plant construction 36.00 36.00 36.00 16.00 4.50 36.00 4.95 4.64 186 175.50 900.00 Total cash $279.90 SIOS.00 $1,006.46 5109.87 5111
$279.90 Total cast disbursements $105.09 $1,006.46 5109.87 $111.24 Net cash flow $191.97 $15.41 -9915.65 $200.72 -$15.43 -514.34 (Receipts - disbursements) Beginning cash balance 150.72 -$41.25 $56.66 $97231 -51,173.03 -$1.183.16 $1,173.03 $1,188.16 Ending cash balance Target (minimum) cash balance -$41.25 - 150.72 $56.66 150.72 $1,202.80 - 150.72 150.72 -150.72 $191.97 520738 51,323.75 -$1,339.18 $1,35352 Surplus (shortfall) cash id Un the information provided in the budget to complete the following sentences Hellon 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, Mellon will generate to end the year with a coh of and a cash of Mellon Company will want a credit line of at least to con the morth with the greatest shortfall, and the financial managers can tell the bank to expect that they will be sble to invest up to short-term marketable securities
Mellon Company's financial managers are meeting with the company's bank to renew their line of credit and discuss their mestment 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: • Mellon's total sales for each month were first calculated in the sales budget and are reflected on the first line of the cast budget. • Mellon's sales are made on credit with terms of 2/10, net 30. Melon's experience is that 15% is collected from customers who take Indvantage of the discount, 75% is collected in the second month, and the last 10% a collected in the third month after the sale. The budget assures that there are no bad debts. • The cost of materials averages 55% of Melton's finished product. The purchases are generally made one month in advance of the sale, and Mellon pays its suppliers in 30 days. Accordingly. Buy sales are forecasted at $90.00 million, then purchases dungo hune would be $54.45 million (599.00 million x 55%), and this amount would be paid in July • Other cash expenses indude wages and sales at 10% of monthly sales, monthly rent of 536.00 mtion, and other expenses equal to 5 of monthly sales. Estimated tax payments of $175.50 million and $185.40 million are required to be paid on July 15 and October 15, respectively. In addition, a $900.00 million payment for a new plant must be made in September • Assume that Mellon's targeted cash balance is $150.72 million, and the estimated cash on hand on July 11 5150.72 million
May Jun Jul Aug Sep Oct Νον Dec $85.50 Credit sales Credit purchases $90.00 $90.90 $88.20 49.50 $99.00 592.70 51.98 $94.50 51.46 50.99 $97.20 54.45 Jul Aug Sep Oct Nov Dec $13.36 $13.63 $13.89 $14.29 $14.55 67.50 68.18 69.53 70.88 22.90 8.82 9.00 9.09 9.27 Cash receipts Collections from this month's sales Collections from previous month's sales Collections from sales two months previously Total cash receipts Cash disbursements Payments for credit purchases Wages and stones Rent Other expenses $89.68 $90.81 $92.51 $94.44 $96.00 $49.50 $50.00 $50,99 353.46 556:45 14.40 14:54 15.84 14.83 36.00 15.55 36.00 36.00 36.00 36.00 4.50 4.55 4.86 4.95 Taxes 175.50 900.00 Payment for plant construction 590 S105 ne 14 Y SIGN 1124
construction $279.90 $105.09 $1,006.46 $109.87 $111.24 Total cash disbursements $191.97 515,41 5915.65 $200.72 $15.43 -514 34 Net cash flow (Receipts disbursements) Beginning cash balance 150.72 541.25 - $56.66 -5972.31 $1,173.03 -$1,188.46 $56.66 $1,202.80 -$41.25 - 150.72 -51.173.03 150.72 $1,188.46 150.72 150.72 150.72 Ending cash balance Target (minimum cash balance Surplus (shortfall) cash $191.97 $20738 $1,323.75 $1,239.18 $1,353.52 Use the information provided in the budget to complete the following sentences Mellon 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, Mellon will to end the year with a cash of and a cash of Mellon 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