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 $ 522,000 402,000 465,000 Kayak requires a minimum cash balance of $40,000 at each month-end. Loans taken to meet this requirement charge 1%, Interest per month, pald at each month-end. The Interest is computed based on the beginning balance of the loan for the month. Any preliminary cash balance above $40,000 is used to repay loans at month-end. The company has a cash balance of $40,000 and a loan balance of $80,000 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 Total cash payments Preliminary cash balance Loan activity Interest on loan Ending cash balance Cash payments $ 471,000 351,000 525,000 Loan balance- Beginning of month Additional loan (loan repayment) Loan balance, end of month KAYAK COMPANY Cash Budget $ January 40,000 $ 522,000 562,000 Loan balance $ 0 80,000 February 40,000 $ 402,000 442,000 0 $ March 40,000 465,000 505,000 0

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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
$ 522,000
402,000
465,000
Kayak requires a minimum cash balance of $40,000 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 $40,000 is used to repay loans at month-end. The company has a cash balance of $40,000 and a loan balance of
$80,000 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
Total cash payments
Preliminary cash balance
Loan activity
Interest on loan
Ending cash balance
Cash payments
$ 471,000
351,000
525,000
Loan balance - Beginning of month
Additional loan (loan repayment)
Loan balance, end of month
KAYAK COMPANY
Cash Budget
$
January
40,000 $
522,000
562,000
Loan balance
$
80,000
February
40,000 $
402,000
442,000
$
March
40,000
465,000
505,000
0
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 $ 522,000 402,000 465,000 Kayak requires a minimum cash balance of $40,000 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 $40,000 is used to repay loans at month-end. The company has a cash balance of $40,000 and a loan balance of $80,000 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 Total cash payments Preliminary cash balance Loan activity Interest on loan Ending cash balance Cash payments $ 471,000 351,000 525,000 Loan balance - Beginning of month Additional loan (loan repayment) Loan balance, end of month KAYAK COMPANY Cash Budget $ January 40,000 $ 522,000 562,000 Loan balance $ 80,000 February 40,000 $ 402,000 442,000 $ March 40,000 465,000 505,000 0 0
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