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Kayak Co. budgeted the following cash receipts (excluding cash receipts from loans received) and cash payments (excluding cash payments for loan principal and interest payments) for the first three months of next year. Cash Cash Receipts $528, 000 409, 000 452,000 payments $470,400 January February 351,400 534, 000 March According to a credit agreement with its bank, Kayak requires a minimum cash balance of $40,000 at each month-end. In return, the bank has agreed that the company can borrow up to $150,000 at a monthly interest rate of 1%, paid on the last day of each month. The interest is computed based on the beginning balance of the loan for the month. The company repays loan principal with any cash in excess of $40,000 on the last day of each month. The company has a cash balance of $40,000 and a loan balance of $80,000 at January 1. Prepare monthly cash budgets for January, February, and March. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign.) Answer is complete but not entirely correct. KAYAK COMPANY Cash Budget For January, February, and March January February March Beginning cash balance Cash receipts Total cash available Cash payments Interest expense Preliminary cash balance Additional loan (loan repayment) Ending cash balance 40,000 $ 40,000 74,168 528,000 409,000 452,000 568,000 449,000 526, 168 (470,400) (351,400) ( (534,000) (800) O (232) 96,800 97,368 (7,832) (56,800) (23,200) 1,032 8 40,000 74,168 40,000 Loan balance li nan halance- Reninninn of month Is Rn n0n 23 200

Kayak Co. budgeted the following cash receipts (excluding cash receipts from loans received) and cash payments (excluding cash payments for loan principal and interest payments) for the first three months of next year. Cash Cash Receipts $528, 000 409, 000 452,000 payments $470,400 January February 351,400 534, 000 March According to a credit agreement with its bank, Kayak requires a minimum cash balance of $40,000 at each month-end. In return, the bank has agreed that the company can borrow up to $150,000 at a monthly interest rate of 1%, paid on the last day of each month. The interest is computed based on the beginning balance of the loan for the month. The company repays loan principal with any cash in excess of $40,000 on the last day of each month. The company has a cash balance of $40,000 and a loan balance of $80,000 at January 1. Prepare monthly cash budgets for January, February, and March. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign.) Answer is complete but not entirely correct. KAYAK COMPANY Cash Budget For January, February, and March January February March Beginning cash balance Cash receipts Total cash available Cash payments Interest expense Preliminary cash balance Additional loan (loan repayment) Ending cash balance 40,000 $ 40,000 74,168 528,000 409,000 452,000 568,000 449,000 526, 168 (470,400) (351,400) ( (534,000) (800) O (232) 96,800 97,368 (7,832) (56,800) (23,200) 1,032 8 40,000 74,168 40,000 Loan balance li nan halance- Reninninn of month Is Rn n0n 23 200

FINANCIAL ACCOUNTING
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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Kayak Co. budgeted the following cash receipts (excluding cash receipts from loans received) and cash payments (excluding cash payments for loan principal and interest payments) for the first three months of next year. Cash Cash Receipts $528,000 payments $470,400 351,400 534,000 January February 409,000 March 452,000 According to a credit agreement with its bank, Kayak requires a minimum cash balance of $40,000 at each month-end. In return, the bank has agreed that the company can borrow up to $150,000 at a monthly interest rate of 1%, paid on the last day of each month. The interest is computed based on the beginning balance of the loan for the month. The company repays loan principal with any cash in excess of $40,000 on the last day of each month. The company has a cash balance of $40,000 and a loan balance of $80,000 at January 1. Prepare monthly cash budgets for January, February, and March. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign.) 8 Answer is complete but not entirely correct. KAYAK COMPANY Cash Budget For January, February, and March January February March Beginning cash balance 40,000 40,000 O $ 74,168 O Cash receipts 528,000 409,000 O 452,000 O Total cash available 568,000 449,000 526,168 Cash payments (470,400) (351,400) O (534,000) O Interest expense (800) O (232) O Preliminary cash balance Additional loan (loan repayment) 96,800 97,368 O (7,832) O (56,800) O (23,200) O 1,032 X Ending cash balance 40,000 24 74,168 O$ 40,000 O Loạn balance lLoan halance - Reginning of month 80 000 23 200 Is
Transcribed Image Text:Kayak Co. budgeted the following cash receipts (excluding cash receipts from loans received) and cash payments (excluding cash payments for loan principal and interest payments) for the first three months of next year. Cash Cash Receipts $528,000 payments $470,400 351,400 534,000 January February 409,000 March 452,000 According to a credit agreement with its bank, Kayak requires a minimum cash balance of $40,000 at each month-end. In return, the bank has agreed that the company can borrow up to $150,000 at a monthly interest rate of 1%, paid on the last day of each month. The interest is computed based on the beginning balance of the loan for the month. The company repays loan principal with any cash in excess of $40,000 on the last day of each month. The company has a cash balance of $40,000 and a loan balance of $80,000 at January 1. Prepare monthly cash budgets for January, February, and March. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign.) 8 Answer is complete but not entirely correct. KAYAK COMPANY Cash Budget For January, February, and March January February March Beginning cash balance 40,000 40,000 O $ 74,168 O Cash receipts 528,000 409,000 O 452,000 O Total cash available 568,000 449,000 526,168 Cash payments (470,400) (351,400) O (534,000) O Interest expense (800) O (232) O Preliminary cash balance Additional loan (loan repayment) 96,800 97,368 O (7,832) O (56,800) O (23,200) O 1,032 X Ending cash balance 40,000 24 74,168 O$ 40,000 O Loạn balance lLoan halance - Reginning of month 80 000 23 200 Is
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