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 $ 519,000 412,000 467,000 $ 465,800 358,800 531,000 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.) Beginning cash balance Add: Cash receipts Answer is not complete. KAYAK COMPANY Cash Budget January February March $ 50,000 519,000 412,000 467,000 569,000 Total cash available Less: Cash payments for All items excluding interest 465,800 358,800 531,000 Interest on loan 1,000 Total cash payments 466,800 358,800 531,000 Preliminary cash balance 102.200
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 $ 519,000 412,000 467,000 $ 465,800 358,800 531,000 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.) Beginning cash balance Add: Cash receipts Answer is not complete. KAYAK COMPANY Cash Budget January February March $ 50,000 519,000 412,000 467,000 569,000 Total cash available Less: Cash payments for All items excluding interest 465,800 358,800 531,000 Interest on loan 1,000 Total cash payments 466,800 358,800 531,000 Preliminary cash balance 102.200
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
h6
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
Cash Receipts Cash payments
$ 519,000
412,000
467,000
$ 465,800
358,800
531,000
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.)
Beginning cash balance
Add: Cash receipts
Answer is not complete.
KAYAK COMPANY
Cash Budget
January
February
March
$
50,000
519,000
412,000
467,000
569,000
Total cash available
Less: Cash payments for
All items excluding interest
465,800
358,800
531,000
Interest on loan
1,000
Total cash payments
466,800
358,800
531,000
Preliminary cash balance
102.200
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