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 $ 524,000 412,500 466,000 Kayak requires a minimum cash balance of $30,000 at each month-end. The company can borrow money at a monthly interest rate of 1%, paid on the last day of each month. 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 Add: Cash receipts Total cash available $ 466,400 354,900 532,000 Less: Cash payments for All items excluding interest Interest on loan Total cash payments Preliminary cash balance Loan activity Additional loan (loan repayment) KAYAK COMPANY Cash Budget $ January 30,000 0 February 0 March
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.
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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
Cash Receipts Cash payments
$ 524,000
$ 466,400
412,500
466,000
Kayak requires a minimum cash balance of $30,000 at each month-end. The company can borrow money at a monthly interest rate of
1%, paid on the last day of each month. 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.
354,900
532,000
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
Total cash available i
Less: Cash payments for
All items excluding interest
Interest on loan
Total cash payments
Preliminary cash balance
Loan activity
Additional loan (loan repayment)
KAYAK COMPANY
Cash Budget
S
January
30,000
0
February
0
March](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd3824b55-af29-4e78-943b-f923818c94e5%2F8f8b816a-6518-4751-a81d-73bd835977a7%2F9zrtciw_processed.jpeg&w=3840&q=75)
![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
Total cash available
Less: Cash payments for
All items excluding interest
Interest on loan
Total cash payments
Preliminary cash balance
Loan activity
Additional loan (loan repayment)
Ending cash balance
Loan balance-Beginning of month
Additional loan (loan repayment)
Loan balance, end of month i
KAYAK COMPANY
Cash Budget
$
January
30,000
Loan balance
$
0
60,000
February
0
$
March](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd3824b55-af29-4e78-943b-f923818c94e5%2F8f8b816a-6518-4751-a81d-73bd835977a7%2Fljm6zo7_processed.jpeg&w=3840&q=75)
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