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 payments Becelts $519.000 401.500 459.000 February 355.400 521.000 According to a credit agreement with the company's bank, Kayak promises to have a minimum cash balance of $40,000 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 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 $40,000 on the last day of each month. The company has a cash balance of $40,000 and a loan balance of $80,000 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 det For January February March Total cash valable Preliminary cash balance Ending cash balance Lo balance Loan balance - Beginning of month Adatonal loan Da m en < Prev 2 4 Next >

Answer 1

KAYAK COMPANY Cash Budget For January, February, and March January February March Beginning cash balance 40000 40000 63113 Cash receipts 519000 407500 459000 Total cash available 559000 447500 522113 Cash payment -466900 -355400 -521000 Interest expense -800 -287 Preliminary cash balance 91300918131113 Additional loan (loan repayment) -51300 -28700 38887 Ending cash balance 40000 63113 40000 Loan balance Loan balance - Beginning of month 8000028700 Additional loan (loan repayment) -51300 -28700 3 8887 Loan balance - End of month 28700 0 388871