Walk me through each calculation in the Cash Budget Table Cash Receipts $525,000 Cash Payments $475,000 January February March 400,000 450,000 350,000 525,000 Kayak requires a minimum cash balance of $30,000 at each month-end. Loans taken to meet this requirement charge 1% interest per month, paid at each month-end. The interest is computed based on the beginning balance of the loan for the month. Any preliminary cash balance above $30,000 is used to repay loans at month-end. The company has a cash balance of $30,000 and a loan balance of $60,000 at January 1. Kayak Company Cash Budget For January, February, and March January February March Beginning cash balance $30,000 $30,000 $69,294 Cash receipts 525,000 400,000 450.000 Total cash available 555,000 430,000 519,294 Cash payments (475,000) (350,000) (525,000) Interest expense (1% per month) (600) (106) 0 Preliminary cash balance 79,400 79,894 (5,706) Additional loan (loan repayment) (49.400) (10,600) 35,706 Ending cash balance $30,000 $69,294 $30,000 Loan balance Loan balance beginning of month $60,000 $10,600 $0 Additional loan (loan repayment) Loan balance - End of month (49,400) (10,600) 35,706 $10,600 $0 $35,706
Walk me through each calculation in the Cash Budget Table Cash Receipts $525,000 Cash Payments $475,000 January February March 400,000 450,000 350,000 525,000 Kayak requires a minimum cash balance of $30,000 at each month-end. Loans taken to meet this requirement charge 1% interest per month, paid at each month-end. The interest is computed based on the beginning balance of the loan for the month. Any preliminary cash balance above $30,000 is used to repay loans at month-end. The company has a cash balance of $30,000 and a loan balance of $60,000 at January 1. Kayak Company Cash Budget For January, February, and March January February March Beginning cash balance $30,000 $30,000 $69,294 Cash receipts 525,000 400,000 450.000 Total cash available 555,000 430,000 519,294 Cash payments (475,000) (350,000) (525,000) Interest expense (1% per month) (600) (106) 0 Preliminary cash balance 79,400 79,894 (5,706) Additional loan (loan repayment) (49.400) (10,600) 35,706 Ending cash balance $30,000 $69,294 $30,000 Loan balance Loan balance beginning of month $60,000 $10,600 $0 Additional loan (loan repayment) Loan balance - End of month (49,400) (10,600) 35,706 $10,600 $0 $35,706
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Walk me through each calculation in the Cash Budget Table
Transcribed Image Text:Cash
Receipts
$525,000
Cash
Payments
$475,000
January
February
March
400,000
450,000
350,000
525,000
Kayak requires a minimum cash balance of $30,000 at each month-end. Loans taken to meet this
requirement charge 1% interest per month, paid at each month-end. The interest is computed based
on the beginning balance of the loan for the month. Any preliminary cash balance above $30,000 is
used to repay loans at month-end. The company has a cash balance of $30,000 and a loan balance
of $60,000 at January 1.
Kayak Company
Cash Budget
For January, February, and March
January February
March
Beginning cash balance
$30,000
$30,000
$69,294
Cash receipts
525,000
400,000
450.000
Total cash available
555,000
430,000
519,294
Cash payments
(475,000)
(350,000)
(525,000)
Interest expense (1% per month)
(600)
(106)
0
Preliminary cash balance
79,400
79,894
(5,706)
Additional loan (loan repayment)
(49.400)
(10,600)
35,706
Ending cash balance
$30,000
$69,294
$30,000
Loan balance
Loan balance beginning of month
$60,000
$10,600
$0
Additional loan (loan repayment)
Loan balance - End of month
(49,400)
(10,600)
35,706
$10,600
$0
$35,706
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