A Lake Mary contractor has a bank line of credit with a $500,000 limit. Current outstanding balance is $315,000, and management plans a $64,000 draw. What availability remains after the draw?
Correct Answer
D) $121,000
Line availability after a planned draw equals credit limit less current balance and the new draw.
Why This Is the Correct Answer
Line availability after a planned draw equals credit limit less current balance and the new draw.
Why the Other Options Are Wrong
Option A: $185,000
$185,000 is above the supported result for line of credit; it likely adds an unsupported amount or compares the wrong financial base.
Option B: $436,000
$436,000 is above the supported result for line of credit; it likely adds an unsupported amount or compares the wrong financial base.
Option C: $379,000
$379,000 is above the supported result for line of credit; it likely adds an unsupported amount or compares the wrong financial base.
Memory Technique
Line Of Credit drawer for Controller Reviews: label availability before counting dollars.
Reference Hint
Open-book path: tab Contractor's Manual, 2025 to Business Administration, Banking and Credit-Line Administration; confirm the administrative duty, record, or control described in the stem.
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