Ans:
KARIM CORP | |||
CASH BUDGET | |||
FOR JULY, AUGUST AND SEPTEMBER | |||
JULY $ | AUGUST $ | SEPTEMBER $ | |
Beginning cash balance | 9,700 | 9,300 | 9,300 |
Cash receipts | +25,300 | +33,300 | +41,300 |
TOTAL CASH AVAILABLE | 35,000 | 42,600 | 50,600 |
Cash payments | -29,950 | -31,300 | -33,300 |
Interest expense | 0 | -85 | -47 |
PRELIMINARY CASH BALANCE | 5,050 | 11,215 | 17,253 |
Additional loan/(Loan repayment) | +4,250 | -1,915 | -2,335 |
ENDING CASH BALANCE | 9,300 | 9,300 | 14,918 |
LOAN BALANCE | |||
Loan balance- Beginning of month | 0 | 4,250 | 2,335 |
Additional loan/(Loan repayment) | +4,250 | -1,915 | -2,335 |
Loan balance- End of month | 4,250 | 2,335 | 0 |
Workings:
July loan = 9,300-5,050 = 4,250
August interest expense = 4,250 * 2% = 85
August loan repayment = 11,215-9,300 = 1,915
August loan balance = 4,250-1,915 = 2,335
September interest expense = 2,335 * 2% = 47
September cash balance is enough to repay the complete loan amount.
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