Blake Company has $15,000 cash at the beginning of June and anticipates $50,000 in cash receipts and $34,500 in cash disbursements. The company requires a minimum cash balance of $20,000. Any excess cash over the minimum desired balance is used to pay down debts. Blake has an agreement with its bank to borrow as needed or to repay loans as funds become available. As of May 31, the company owes $15,000 to the bank. The balance of the loan on June 30 will be:

Question

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Blake Company starts with $15,000 and expects $50,000 in receipts, totaling $65,000. After $34,500 in disbursements, $30,500 remains. To maintain a $20,000 minimum balance, $10,500 is available to repay the $15,000 debt, leaving a $4,500 loan balance.

Blake Company Has $15,000 Cash at the Beginning of June