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. Beginning cash balance S Add: Cash receipts Total cash available Less: Cash payments for All items excluding interest KARIM CORPORATION Interest on loan Total cash payments Preliminary cash balance Loan activity Additional loan (loan repayment) Ending cash balance Loan balance - Beginning of month Additional loan (loan repayment) Loan balance - End of month Cash Budget July August September $ 8,800 24,400 32,400 40,400 33,200 O Loan balance 0 0 0
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. Beginning cash balance S Add: Cash receipts Total cash available Less: Cash payments for All items excluding interest KARIM CORPORATION Interest on loan Total cash payments Preliminary cash balance Loan activity Additional loan (loan repayment) Ending cash balance Loan balance - Beginning of month Additional loan (loan repayment) Loan balance - End of month Cash Budget July August September $ 8,800 24,400 32,400 40,400 33,200 O Loan balance 0 0 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
Beginning cash balance
S
Add: Cash receipts
Total cash available
Less: Cash payments for
All items excluding interest
KARIM CORPORATION
Interest on loan
Total cash payments
Preliminary cash balance
Loan activity
Additional loan (loan repayment)
Ending cash balance
Loan balance - Beginning of month
Additional loan (loan repayment)
Loan balance - End of month
Cash Budget
July
August
September
$
8,800
24,400
32,400
40,400
33,200
O
Loan balance
0
0
0
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