JanuaryFebruaryMarchCashReceipts$525,000400,000450,000CashPayments$475,000350,000525,000Kayak requires a minimum cash balance of $30,000 at each month-end. Loans taken to meet thisrequirement charge 1% interest per month, paid at each month-end. The interest is computed basedon the beginning balance of the loan for the month. Any preliminary cash balance above $30,000 isused to repay loans at month-end. The company has a cash balance of $30,000 and a loan balanceof $60,000 at January 1.Kayak CompanyCash BudgetFor January, February, and MarchJanuary FebruaryMarchBeginning cash balance$30,000$30,000$69,294Cash receipts525,000400,000450,000Total cash available555,000430,000519,294Cash payments(475,000)(350,000)(525,000)Interest expense (1% per month)(600)(106)0Preliminary cash balance79,40079,894(5,706)Additional loan (loan repayment)(49.400)(10,600)35,706Ending cash balance$30,000$69,294$30,000Loan balanceLoan balance beginning of month$60,000$10,600$0Additional loan (loan repayment)Loan balance - End of month(49,400)(10,600)35,706$10,600$0$35,706

Kayak Company's cashbudget for January to March ensures a minimum cash balance of $30,000monthly by…

Answered: January February March Cash Receipts…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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