Kayak Company budgeted the following cash receipts (excluding cash receipts from loans received) and cash payments (excludingcash payments for loan principal and interest payments) for the first three months of next year.Cash Receipts$ 521,000Cash payments$ 467,800JanuaryFebruaryMarch410,500458,000357,300531,000Kayak requires a minimum cash balance of $50,000 at each month-end. The company can borrow money at a monthly interest rate of1%, paid on the last day of each month. The interest is computed based on the beginning balance of the loan for the month. Anypreliminary cash balance above $50,000 is used to repay loans at month-end. The company has a cash balance of $50,000 and aloan balance of $100,000 at January 1.Prepare monthly cash budgets for January, February, and March. (Negative balances and Loan repayment amounts (if any) shouldbe indicated with minus sign.)KAYAK COMPANYCash BudgetJanuaryFebruaryMarchBeginning cash balance$50,000Total cash availableTotal cash paymentsPreliminary cash balanceLoan activityEnding cash balanceLoan balanceLoan balance - Beginning of monthAdditional loan (loan repayment)$100,000Loan balance, end of month

Solution: Monthly cash budget for January, February and march is as under:

Answered: Kayak Company budgeted the following…

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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