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 Receipts Cash payments January February March $523,000 $468,700 409,500 459,000 355,200 535,000 According to a credit agreement with its bank, Kayak requires a minimum cash balance of $30,000 at each month-end. In return, the bank has agreed that the company can borrow up to $140,000 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 $30,000 on the last day of each month. The company has a cash balance of $30,000 and a loan balance of $60,000 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.)
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 Receipts Cash payments January February March $523,000 $468,700 409,500 459,000 355,200 535,000 According to a credit agreement with its bank, Kayak requires a minimum cash balance of $30,000 at each month-end. In return, the bank has agreed that the company can borrow up to $140,000 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 $30,000 on the last day of each month. The company has a cash balance of $30,000 and a loan balance of $60,000 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.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Exercise 20-17 Preparation of cash budgets (for three periods) LO P2
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
Receipts
Cash
payments
January
February
March
$523,000
$468,700
409,500
459,000
355,200
535,000
According to a credit agreement with its bank, Kayak requires a minimum cash balance of $30,000 at each month-end. In return, the
bank has agreed that the company can borrow up to $140,000 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 $30,000 on the last day of each month. The company has a cash balance of $30,000 and a loan balance of $60,000 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.)
Beginning cash balance
Total cash available
Preliminary cash balance
Ending cash balance
KAYAK COMPANY
Cash Budget
For January, February, and March
Loan balance - Beginning of month
Additional loan (loan repayment)
Loan balance - End of month
January
$
30,000
Loan balance
$
60,000
February
March
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