Question

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. Cash Cash Receipts $518,000 403,000 464,000 payments $463,700 348,700 524,000 January February March According to a credit agreement with the company's bank, Kayak promises to have 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 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 March Beginning cash balance 30,000 Total cash available Preliminary cash balance Ending cash balance Loan balance Loan balance - Beginning of month 60,000 Additional loan (loan repayment) Loan balance - End of month

Answer 1

KAYAK Company Cash Budget For January, February and March January February March Beginning Cash Balance 30000 30000 77937 Cash Receipts 1518000 403000 464000 Total Cash Receipts 548000 433000 541937 Cash Payments -463700 -348700-524000 Interest Expenses -600 -631 Preliminary Cash balance 8370084237 17937 Additional Laon (Loan Payment) -53700 -6300 -12063 Ending Cash Balance 30000 77937 30000 Loan Balance Loan Balance - Beginning of Month 60000 6300 Additional Loan (Loan Payment) -537001 -6300 12063 Loan balance - End of Month 6300 0 12063 Loans January = 83700-30000= 53700(Payment) February =6300(Payment) March = 12063(Loan taken)