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. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign.) KAYAK COMPANY Cash Budget January February March Beginning cash balance Add: Cash receipts $ 40,000 $ 40,000 $ 74,168 522,000 400,500 467,000 Total cash available 562,000 440,500 541,168 Less: Cash payments for Interest on loan (800) (232) 0 All items excluding interest 464,400 342,900 526,000 Total cash payments 463,600 342,668 526,000 Preliminary cash balance 96,800 97,368 Loan activity Additional loan (loan repayment) Ending cash balance Loan balance - Beginning of month Additional loan (loan repayment) Loan balance, end of month (56,800) (23,200) $ 40,000 $ 74,168 $ 40,000 Loan balance $ 80,000 $ 23,200 $ 0 (56,800) (23,200) $ 23,200 $ 이
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. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign.) KAYAK COMPANY Cash Budget January February March Beginning cash balance Add: Cash receipts $ 40,000 $ 40,000 $ 74,168 522,000 400,500 467,000 Total cash available 562,000 440,500 541,168 Less: Cash payments for Interest on loan (800) (232) 0 All items excluding interest 464,400 342,900 526,000 Total cash payments 463,600 342,668 526,000 Preliminary cash balance 96,800 97,368 Loan activity Additional loan (loan repayment) Ending cash balance Loan balance - Beginning of month Additional loan (loan repayment) Loan balance, end of month (56,800) (23,200) $ 40,000 $ 74,168 $ 40,000 Loan balance $ 80,000 $ 23,200 $ 0 (56,800) (23,200) $ 23,200 $ 이
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
mn.3
Transcribed Image Text: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. (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
February
March
$
40,000
$
40,000 $
74,168
522,000
400,500
467,000
562,000
440,500
541,168
Less: Cash payments for
Interest on loan
(800)
(232)
0
All items excluding interest
464,400
342,900
526,000
Total cash payments
463,600
342,668
526,000
Preliminary cash balance
96,800
97,368
Loan activity
Additional loan (loan repayment)
Ending cash balance
Loan balance - Beginning of month
Additional loan (loan repayment)
Loan balance, end of month
(56,800)
(23,200)
$
40,000 $
74,168 $
40,000
Loan balance
$
80,000 $
(56,800)
23,200 $
(23,200)
0
$
23,200 $
0
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