Question

Ch 07 Ex 7-17 A Saved Help Save & Exit Submit Check my work Kayak Co. 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. points January February March Cash Receipts $516,000 404,000 477,000 Cash payments $ 459,500 347,500 532,000 eBook Hint Ask According to a credit agreement with its bank, Kayak requires a minimum cash balance of $30,000 at each month-end. In return, the bank has agreed that the company can borrow up to $160,000 at a monthly interest rate of 1%, paid on the last day of each month. The interest is computed based on the beginning balance of the loan for the month. The company repays loan principal with any cash in excess of $30,000 on the last day of each month. The company has a cash balance of $30,000 and a loan balance of $60,000 at January 1. Print References 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 For January, February, and March January February $ 30,000 March Beginning cash balance Total cash available

Answer 1

Cash budget Particulars January February March Beginning cash Balance $ 30,000 $ 30,000 $ 82,359 Cash collection | $ 516,000 $ 404,000 $ 477,000 Total available $ 546,000 $ 434,000 $ 559,359 Cash payments $(459,500) $(347,500)| $(532,000) Interest $ (600) $ (41) $ - Preliminary cash $ 85,900 $ 86,459 $ 27,359 Loan taken/(Paid) $ (55,900) $ (4,100) $ 2,641 Ending Cash Balance $ 30,000 $ 82,359 $ 30,000 Loan Balance Particulars January February March Loan Balance-Beginning $ 60,000 $ 4,100 $ .. Loan taken / (Paid) $ (55,900) $ (4,100) $ 2,641 Loan balance -Ending $ 4,100 $ - $ 2,641 Interest of January = 60000 * 1% = 600 Interest of Febraury = 4100 * 1% = 41