Kayak Co. budgeted the following cash recelpts (excluding cash recelpts from loans recelved) and cash payments (excluding cash payments for loan principal and Interest payments) for the first three months of next year. Cash Cash January February March Receipts $523,000 405,500 453,000 payments $465,400 347,900 535,000 According to a credit agreement with its bank, Kayak requires a minimum cash balance of $50,000 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%, pald 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 $50,000 on the last day of each month. 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. (Negatlve balances and Loan repayment amounts (If any) should be Indicated with minus sign.) KAYAK COMPANY Cash Budget For January, February, and March January February March Beginning cash balance Cash receipts Total cash available Cash payments Interest expense 50,000 Preliminary cash balance Additional loan (loan repayment) Ending cash balance Loan balance Loan balance - Beginning of month S 100,000 Additional loan (loan repayment) Loan balance - End of month
Kayak Co. budgeted the following cash recelpts (excluding cash recelpts from loans recelved) and cash payments (excluding cash payments for loan principal and Interest payments) for the first three months of next year. Cash Cash January February March Receipts $523,000 405,500 453,000 payments $465,400 347,900 535,000 According to a credit agreement with its bank, Kayak requires a minimum cash balance of $50,000 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%, pald 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 $50,000 on the last day of each month. 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. (Negatlve balances and Loan repayment amounts (If any) should be Indicated with minus sign.) KAYAK COMPANY Cash Budget For January, February, and March January February March Beginning cash balance Cash receipts Total cash available Cash payments Interest expense 50,000 Preliminary cash balance Additional loan (loan repayment) Ending cash balance Loan balance Loan balance - Beginning of month S 100,000 Additional loan (loan repayment) Loan balance - End of month
Chapter6: Managing Cash Flow
Section: Chapter Questions
Problem 1EP
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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
Transcribed Image Text:Kayak Co. budgeted the following cash recelpts (excluding cash receipts from loans recelved) 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
405,500
453,000
раyments
$465,400
347,900
535,000
January
February
March
According to a credit agreement with its bank, Kayak requires a minimum cash balance of $50,000 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%,
pald 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 $50,000 on the last day of each month. 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. (Negatlve balances and Loan repayment amounts
(If any) should be Indicated with minus sign.)
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
50,000
Loan balance
Loan balance - Beginning of month
Additional loan (loan repayment)
100,000
Loan balance - End of month
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