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.     Cash Receipts Cash payments January $ 520,000 $ 463,500 February 401,500 345,000 March 465,000 527,000   Kayak requires a minimum cash balance of $50,000 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 $50,000 is used to repay loans at month-end. The company has a cash balance of  $50,000 and a loan balance of $100,000 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.)

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.
 

  Cash Receipts Cash payments
January $ 520,000 $ 463,500
February 401,500 345,000
March 465,000 527,000

 
Kayak requires a minimum cash balance of $50,000 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 $50,000 is used to repay loans at month-end. The company has a cash balance of  $50,000 and a loan balance of $100,000 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
Total cash available
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
KAYAK COMPANY
Cash Budget
$
January
Loan balance
$
50,000
100,000
February
0
$
69
March
0
0
Transcribed Image Text:Beginning cash balance Total cash available 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 KAYAK COMPANY Cash Budget $ January Loan balance $ 50,000 100,000 February 0 $ 69 March 0 0
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