Mr. Puffin is currently developing its cash budget for the first three months of operation as well as an investment in machinery in the 3rd month. Mr. Puffin needs assistance determining its financing needs. Specifically, he wants to know how much to borrow or repay, including interest, each month. The first months beginning cash balance is $22,000. Each month requires a minimum ending cash balance of $20,000. The cash collections from revenues for months 1, 2, and 3 are $50,000, $90,000, and $70,000, respectively. The operating cost outflows for months 1, 2, and 3 are $60,000, $80,000, and $50,000, respectively. The third month also includes a $100,000 outflow for an investment in new machinery. Mr. Puffin has access to an $80,000 line of credit, with 10% annual interest rate. For budgeting purposes, borrowings occur on the 1st day of the month and repayments occur as soon as possible with payment on the last day of the month. Round interest calculations to nearest whole number.

1. What is the loan balance at the end of Month 1 2. What is the loan balance at the end of Month 2 3. What is the loan balance at the end of Month 3 4. If interest was paid on the loan, what was the amount of the interest and when was it paid? 5. Is the line of credit adequate?