Cash Receipts Cash payments January February March $520,000 408,000 459,000 $ 469,000 357,000 532,000 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 KAYAK COMPANY Cash Budget January February March $ 30,000 $ 30,000 520,000 408,000 459,000 550,000 438,000 Total cash available Less: Cash payments for Interest on loan 600 All items excluding interest 469,000 357,000 532,000 Total cash payments 469,600 357,000 532,000 Preliminary cash balance 80,400 Loan activity Additional loan (loan repayment) Ending cash balance 30,000 Loan balance $ 60,000 0 Loan balance - Beginning of month Additional loan (loan repayment) Loan balance, end of month

Cash Receipts Cash payments January February March $520,000 408,000 459,000 $ 469,000 357,000 532,000 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 KAYAK COMPANY Cash Budget January February March $ 30,000 $ 30,000 520,000 408,000 459,000 550,000 438,000 Total cash available Less: Cash payments for Interest on loan 600 All items excluding interest 469,000 357,000 532,000 Total cash payments 469,600 357,000 532,000 Preliminary cash balance 80,400 Loan activity Additional loan (loan repayment) Ending cash balance 30,000 Loan balance $ 60,000 0 Loan balance - Beginning of month Additional loan (loan repayment) Loan balance, end of month

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter8: Budgeting

Section: Chapter Questions

Problem 17E

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