Karim Corporation requires a minimum $8,400 cash balance. Loans taken to meet this requirement cost 1% interest per month (paid at the end of each month). Any preliminary cash balance above $8,400 is used to repay loans at month-end. The cash balance on July 1 is $8,800, 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 $ 24,400 28,600 August $ 32,400 30,400 September $ 40,400 32,400 Prepare a cash budget for July, August, and September. Note: Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to the nearest whole dollar.
Karim Corporation requires a minimum $8,400 cash balance. Loans taken to meet this requirement cost 1% interest per month (paid at the end of each month). Any preliminary cash balance above $8,400 is used to repay loans at month-end. The cash balance on July 1 is $8,800, 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 $ 24,400 28,600 August $ 32,400 30,400 September $ 40,400 32,400 Prepare a cash budget for July, August, and September. Note: Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to the nearest whole dollar.
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.
Question
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Transcribed Image Text:5
Beginning cash balance
Add: Cash receipts
Total cash available
Less: Cash payments for
Total cash payments
Preliminary cash balance
Loan activity
Interest on loan
Ending cash balance
Loan balance - Beginning of month
Additional loan (loan repayment).
Loan balance - End of month
KARIM CORPORATION
Cash Budget
$
July
Loan balance
$
8,800 $
24,400
33,200
28,600
28,600
0
August
8,400 $
32,400
40,800
30,400
September
30,400
8,400
40,400
48,800
32,400
32,400
Transcribed Image Text:Karim Corporation requires a minimum $8,400 cash balance. Loans taken to meet this requirement cost 1% interest per month (paid at
the end of each month). Any preliminary cash balance above $8,400 is used to repay loans at month-end. The cash balance on July 1
is $8,800, 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
$ 24,400
28,600
August
$ 32,400
30,400
September
$ 40,400
32,400
Prepare a cash budget for July, August, and September.
Note: Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to
the nearest whole dollar.
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