Problem-
GS Cookie Co. forecasts cash receipts for January and February of $18,000 and $20,000, respectively. Cash Payments of $6,000 and $8,000 are expected in these two months. GS Cookie's cash balance at the beginning of January was $5,000, a level that it attempts to maintain. At the beginning of the year, GS Cookie has a $15,000 balance outstanding on its line of credit at the local bank. Based on its cash budget, how much of the line of credit can GS Cookie repay in January and February?
a). $15,000
b). $9,000
c). $4,000
d). None, GS Cookie must increase its borrowings.
Additional requirement-
The problem belongs to Accounting and it discuss about estimate of loan repayment by a company.