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 $ 521,000 410,500 480,000 Cash payments $ 467,800 357,300 528,000 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. Note: Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Beginning cash balance Add: Cash receipts Total cash available KAYAK COMPANY Cash Budget January $ 30,000 February March Total cash payments Preliminary cash balance Loan activity Ending cash balance Loan balance - Beginning of month Additional loan (loan repayment) Loan balance, end of month 0 0 0 Loan balance $ 60,000 $ 0

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
Cash
Receipts
$ 521,000
410,500
480,000
Cash
payments
$ 467,800
357,300
528,000
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.
Note: Negative balances and Loan repayment amounts (if any) should be indicated with minus sign.
Beginning cash balance
Add: Cash receipts
Total cash available
KAYAK COMPANY
Cash Budget
January
$ 30,000
February
March
Total cash payments
Preliminary cash balance
Loan activity
Ending cash balance
Loan balance - Beginning of
month
Additional loan (loan repayment)
Loan balance, end of month
0
0
0
Loan balance
$ 60,000
$
0
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 $ 521,000 410,500 480,000 Cash payments $ 467,800 357,300 528,000 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. Note: Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Beginning cash balance Add: Cash receipts Total cash available KAYAK COMPANY Cash Budget January $ 30,000 February March Total cash payments Preliminary cash balance Loan activity Ending cash balance Loan balance - Beginning of month Additional loan (loan repayment) Loan balance, end of month 0 0 0 Loan balance $ 60,000 $ 0
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