The following facts relate to the following six (6) multiple choice questions. You must show all calculations for credit.Do calculations on separate sheet of paper.

The Clare County Air Compressor Company sells a single product for $295.00. The first day of business was January 2, 2016. Budgeted sales and purchases for the coming first four months of business are given below:

Sales are collected 20 per cent in the month of sale and 80 per cent in the following month. Purchases are paid for one month after purchase in total. In order to start off on the right foot, the company investors contributed $150,000 cash, which was the only asset on the books of the company as of January 2, 2016.

A line of credit has been obtained by Clare County Air Compressor Company for $250,000. In order to maintain a positive cash balance, they may borrow in $25,000 increments from their line of credit, up to $250,000.