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 $523,000 404,500 482,000 paynents $467,600 349,100 531,000 January February 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 $160,000 at a monthly interest rate of 196, paid on the last day of each month. TH 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.)

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 $523,000 404,500 482,000 paynents $467,600 349,100 531,000 January February 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 $160,000 at a monthly interest rate of 196, paid on the last day of each month. TH 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.)

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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Todd Enterprises is preparing a cash budget for the second quarter of the coming year. The following data have been forecasted: Sales. Merchandise purchases Operating expenses: Payroll.. Advertising Rent. Depreciation End of April balances: Cash Bank loan payable. May April $150,000 $157,500 107,000 112,400 13,600 5,400 2,500 7,500 30,000 26,000 14,280 5,700 2,500 7,500 Additional data: (1) Sales are 40% cash and 60% credit. The collection pattern for credit sales is 50% in the month following the sale and 50% in the month thereafter. Total sales in March were $125,000. (2) Purchases are all on credit, with 40% paid in the month of purchase and 60% paid in the following month. (3) Operating expenses are paid in the month they are incurred. (4) A minimum cash balance of $25,000 is required at the end of each month. (5) Loans are used to maintain the minimum cash balance. At the end of each month, interest of 1% per month is paid on the outstanding loan balance as of the beginning of the…
Fact Pattern: The Raymar Company is preparing its cash budget for the months of April and May. The firm has established a $200,000 line of credit with its bank at a 12% annual rate of interest on which borrowings for cash deficits must be made in $10,000 increments. There is no outstanding balance on the line of credit loan on April 1. Principal repayments are to be made in any month in which there is a surplus of cash. Interest is to be paid monthly. If there are no outstanding balances on the loans, Raymar will invest any cash in excess of its desired end-of-month cash balance in U.S. Treasury bills. Raymar intends to maintain a minimum balance of $100,000 at the end of each month by either borrowing for deficits below the minimum balance or investing any excess cash. Expected monthly collection and disbursement patterns are shown below. . . . Collections: 50% of the current month's sales budget and 50% of the previous month's sales budget Accounts Payable Disbursements: 75% of the…
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Karim Corporation requires a minimum $8,800 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 $8,800 is used to repay loans at month-end. The cash balance on July 1 is $9,200, 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 Beginning cash balance Add: Cash receipts Total cash available Less: Cash payments for Interest on loan Interest revenue 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. Total cash payments Preliminary cash balance Loan activity July $ 24,800 29,208 Ending cash balance August $ 32,800 30,800 Loan balance Beginning of month Additional loan (loan repayment) Loan…
Kayak Company 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 $ 520,000 $ 463,500 February 401,500 345,000 March 465,000 527,000 Kayak requires a minimum cash balance of $50,000 at each month-end. Loans taken to meet this requirement charge 1%, interest per month, paid at each month-end. The interest is computed based on the beginning balance of the loan for the month. Any preliminary cash balance above $50,000 is used to repay loans at month-end. The company has a cash balance of $50,000 and a loan balance of $100,000 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.)
Dineshbhai
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