Exercise 20-20 (Algo) Cash budget LO P2 Karim Corporation requires a minimum $9,300 cash balance. Loans taken to meet this requirement cost 2% Interest per month (paid at the end of each month). Any preliminary cash balance above $9,300 is used to repay loans at month- end. The cash balance on July 1 is $9,700, and the company has no outstanding loans. Budgeted cash receipts (other than for loans received) and budgeted cash payments (other than for loan or Interest payments) follow. Cash receipts Cash payments July $ 25,300 29,950 August $ 33,300 31,300 September $ 41,300 33,300 Prepare a cash budget for July, August, and September. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to the nearest whole dollar.) Beginning cash balance Total cash available Total cash payments Preliminary cash balance Loan activity Ending cash balance Loan balance - Beginning of month Additional loan (loan repayment) Loan balance - End of month KARIM CORPORATION Cash Budget July August September S 9,700 0 0 0 Loan balance S 0
Exercise 20-20 (Algo) Cash budget LO P2 Karim Corporation requires a minimum $9,300 cash balance. Loans taken to meet this requirement cost 2% Interest per month (paid at the end of each month). Any preliminary cash balance above $9,300 is used to repay loans at month- end. The cash balance on July 1 is $9,700, and the company has no outstanding loans. Budgeted cash receipts (other than for loans received) and budgeted cash payments (other than for loan or Interest payments) follow. Cash receipts Cash payments July $ 25,300 29,950 August $ 33,300 31,300 September $ 41,300 33,300 Prepare a cash budget for July, August, and September. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to the nearest whole dollar.) Beginning cash balance Total cash available Total cash payments Preliminary cash balance Loan activity Ending cash balance Loan balance - Beginning of month Additional loan (loan repayment) Loan balance - End of month KARIM CORPORATION Cash Budget July August September S 9,700 0 0 0 Loan balance S 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text:Exercise 20-20 (Algo) Cash budget LO P2
Karim Corporation requires a minimum $9,300 cash balance. Loans taken to meet this requirement cost 2% Interest per
month (paid at the end of each month). Any preliminary cash balance above $9,300 is used to repay loans at month-
end. The cash balance on July 1 is $9,700, and the company has no outstanding loans. Budgeted cash receipts (other
than for loans received) and budgeted cash payments (other than for loan or Interest payments) follow.
Cash receipts
Cash payments
July
$ 25,300
29,950
August
$ 33,300
31,300
September
$ 41,300
33,300
Prepare a cash budget for July, August, and September. (Negative balances and Loan repayment amounts (if any)
should be indicated with minus sign. Round your final answers to the nearest whole dollar.)
Beginning cash balance
Total cash available
Total cash payments
Preliminary cash balance
Loan activity
Ending cash balance
Loan balance - Beginning of month
Additional loan (loan repayment)
Loan balance - End of month
KARIM CORPORATION
Cash Budget
July
August
September
S
9,700
0
0
0
Loan balance
S
0
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