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January February March Cash Receipts Cash payments $ 515,000 402,000 468,000 $ 456,300 343,300 531,000 Kayak requires a minimum cash balance of $50,000 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 $50,000 is used to repay loans at month-end. The company has a cash balance of $50,000 and a loan balance of $100,000 at January 1. Prepare monthly cash budgets for January, February, and March. Note: Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Beginning cash balance Add: Cash receipts > Answer is complete but not entirely correct. KAYAK COMPANY Cash Budget January February March $ 50,000 $ 50,000 $ 50,000 x 515,000 402,000 468,000 565,000 452,000 518,000 Total cash available Less: Cash payments for All items excluding interest 456,300 343,300 531,000 Interest on loan 1,000 423 0 Total cash payments 457,300 343,723 531,000 Preliminary cash balance 107,700 108,277 (13,000) x Loan activity Additional loan (loan repayment) 57,700x 58,277 Ending cash balance $ 50,000 $ 50,000 $ 13,000 50,000 Loan balance Loan balance - Beginning of month Additional loan (loan repayment) $ 100,000 57,700 $ 42,300 58,277 $ 0 13,000 Loan balance, end of month $ 42,300 $ 0 $ 13,000 X

January February March Cash Receipts Cash payments $ 515,000 402,000 468,000 $ 456,300 343,300 531,000 Kayak requires a minimum cash balance of $50,000 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 $50,000 is used to repay loans at month-end. The company has a cash balance of $50,000 and a loan balance of $100,000 at January 1. Prepare monthly cash budgets for January, February, and March. Note: Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Beginning cash balance Add: Cash receipts > Answer is complete but not entirely correct. KAYAK COMPANY Cash Budget January February March $ 50,000 $ 50,000 $ 50,000 x 515,000 402,000 468,000 565,000 452,000 518,000 Total cash available Less: Cash payments for All items excluding interest 456,300 343,300 531,000 Interest on loan 1,000 423 0 Total cash payments 457,300 343,723 531,000 Preliminary cash balance 107,700 108,277 (13,000) x Loan activity Additional loan (loan repayment) 57,700x 58,277 Ending cash balance $ 50,000 $ 50,000 $ 13,000 50,000 Loan balance Loan balance - Beginning of month Additional loan (loan repayment) $ 100,000 57,700 $ 42,300 58,277 $ 0 13,000 Loan balance, end of month $ 42,300 $ 0 $ 13,000 X

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter8: Budgeting
Section: Chapter Questions
Problem 18E
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January February March Cash Receipts Cash payments $ 515,000 402,000 468,000 $ 456,300 343,300 531,000 Kayak requires a minimum cash balance of $50,000 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 $50,000 is used to repay loans at month-end. The company has a cash balance of $50,000 and a loan balance of $100,000 at January 1. Prepare monthly cash budgets for January, February, and March. Note: Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Beginning cash balance Add: Cash receipts > Answer is complete but not entirely correct. KAYAK COMPANY Cash Budget January February March $ 50,000 $ 50,000 $ 50,000 x 515,000 402,000 468,000 565,000 452,000 518,000 Total cash available Less: Cash payments for All items excluding interest 456,300 343,300 531,000 Interest on loan 1,000 423 0 Total cash payments 457,300 343,723 531,000 Preliminary cash balance 107,700 108,277 (13,000) x Loan activity Additional loan (loan repayment) 57,700x 58,277 Ending cash balance $ 50,000 $ 50,000 $ 13,000 50,000 Loan balance Loan balance - Beginning of month Additional loan (loan repayment) $ 100,000 57,700 $ 42,300 58,277 $ 0 13,000 Loan balance, end of month $ 42,300 $ 0 $ 13,000 X
Transcribed Image Text:January February March Cash Receipts Cash payments $ 515,000 402,000 468,000 $ 456,300 343,300 531,000 Kayak requires a minimum cash balance of $50,000 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 $50,000 is used to repay loans at month-end. The company has a cash balance of $50,000 and a loan balance of $100,000 at January 1. Prepare monthly cash budgets for January, February, and March. Note: Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Beginning cash balance Add: Cash receipts > Answer is complete but not entirely correct. KAYAK COMPANY Cash Budget January February March $ 50,000 $ 50,000 $ 50,000 x 515,000 402,000 468,000 565,000 452,000 518,000 Total cash available Less: Cash payments for All items excluding interest 456,300 343,300 531,000 Interest on loan 1,000 423 0 Total cash payments 457,300 343,723 531,000 Preliminary cash balance 107,700 108,277 (13,000) x Loan activity Additional loan (loan repayment) 57,700x 58,277 Ending cash balance $ 50,000 $ 50,000 $ 13,000 50,000 Loan balance Loan balance - Beginning of month Additional loan (loan repayment) $ 100,000 57,700 $ 42,300 58,277 $ 0 13,000 Loan balance, end of month $ 42,300 $ 0 $ 13,000 X
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