*****Using prior information please help me with the following blanks. Thank you
ID: 2561888 • Letter: #
Question
*****Using prior information please help me with the following blanks. Thank you.
May JuneJuly August September October November December Credit Sales 1155 1188 1210 Credit Purchase 550 555.5 567 578 594 605 0 July August September October November December Cash receipts 270 272 278 283 291 296 Collection from this month's sales (Month's sales 25% less 2% discount) 736 751 Collection from previous month's sales 701 715 722 772 105 108 Collection from sales two months previously 110 113 116 Total Cash receipts 1076 10951110 1130 1155 1184Explanation / Answer
Wallace 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, Wallace will generate $149 to end the year with a cash surplus of $163 and a cash balance of $363. Wallace Company will want a credit line of at least $477 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 $396 in short-term marketable securities.
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