Management would like to maintain a minimum cash balance of at least $4,000 at the end of each month. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month, up to a total loan balance of $20,000. The interest rate on these loans is 1% per month and for simplicity, we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter.

Cash Budget
	April	May	June	Quarter
Cash Balance Beginning	$ 8,000
Add: Cash Collections	56,000
Total Cash Available	64,000
Less Cash Disbursements
For Inventory	47,850
For Expenses	13,300
For Equipment	1,500
Total Cash Disbursements	62,650
Excess (deficiency) of Cash	1,350
Borrowing
Repayments
Interest Paid
Ending Cash Balance