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. January February March Cash Receipts $522,000 481,500 451,000 payments $469,90 349,480 534,00 According to a credit agreement with its bank, Kayak requires a minimum cash balance of $40,000 at each month-end. In return, the the company can borrow up to $140.000 at a monthly Interest rate of 1%, pald 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 Budget For January, February, and March January February $ 40.000 $ 40.000 522.000 400.000 682.000 500.000 March Beginning cash balance Totalca valable m ary cash balance Additional loan doa repayment) Engcshoe Loan balance Beginning of mont

Answer 1

KAYAK Company Cash Budget For January, February and March January February March Beginning Cash Balance Cash Receipts Total Cash Receipts Cash Payments Interest Expenses Preliminary Cash balance Additional Loan (Loan Payment) Ending Cash Balance 40000 40000 63113 522000 451000 401500 562000 441500 514113 -349400 534000 -469900 -800 -287 0 91300 91813 -19887 -51300 -28700 59887 40000 63113 40000 Loan Balance Loan Balance -Beginning of Month Additional Loan (Loan Payment) Loan balance - End of Month 80000 28700 0 -28700 59887 -51300 59887 28700 Loans January -91300-40000 February 51300 Paid 28700 Paid March 59887 Loan Taken