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. January February March Cash Receipts Cash payments $ 525,000 400,000 450,000 Kayak requires a minimum cash balance of $30,000 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 $30,000 is used to repay loans at month-end. 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 $475,000 350,000 525,000 Total cash payments Preliminary cash balance Loan activity Ending cash balance Loan balance Beginning of month Additional loan Doan repayment) Loan balance, end of month KAYAK COMPANY Cash Budget $ January 30,000 Loan balance. S 60,000 February March

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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.
January
February
March
$ 475,000
Cash Receipts Cash payments
$ 525,000
400,000
450,000
Kayak requires a minimum cash balance of $30,000 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 $30,000 is used to repay loans at month-end. 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
Total cash payments
Preliminary cash balance
Loan activity
350,000
525,000
Ending cash balance
Loan balance Beginning of month
Additional loan (oan repayment)
Loan balance, end of month
KAYAK COMPANY
Cash Budget
January
$ 30,000
Loan balance
$
60,000
February
March
Transcribed Image Text: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. January February March $ 475,000 Cash Receipts Cash payments $ 525,000 400,000 450,000 Kayak requires a minimum cash balance of $30,000 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 $30,000 is used to repay loans at month-end. 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 Total cash payments Preliminary cash balance Loan activity 350,000 525,000 Ending cash balance Loan balance Beginning of month Additional loan (oan repayment) Loan balance, end of month KAYAK COMPANY Cash Budget January $ 30,000 Loan balance $ 60,000 February March
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