Question

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Check my work Karim Corp. requires a minimum $8,000 cash balance. Loans taken to meet this requirement cost 1% interest per month (paid monthly). Any excess cash is used to repay loans at month-end. The cash balance on July 1 is $8,400, and the company has no outstanding loans. Forecasted cash receipts (other than for loans received) and forecasted cash payments (other than for loan or interest payments) follow. 0.66 points Cash receipts Cash payments July $20,000 28,000 August $26,000 30,000 September $40,000 22,000 eBook Prepare a cash budget for July, August, and September. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to the nearest whole dollar.) Hint Print References KARIM CORP Cash Budget For July, August, and September July August $ 8,400 September Beginning cash balance Total cash available Preliminary cash balance Ending cash balance Loan balance | Lann halanan Daninning of month Screenshot

Answer 1

Answer

	Jul	Aug	Sept
Beginning Cash Balance	$                       8,400	$                                    8,000	$                                8,000
Cash receipts	$                     20,000	$                                  26,000	$                              40,000
Total Cash available	$                     28,400	$                                  34,000	$                              48,000
Cash payments	$                     28,000	$                                  30,000	$                              22,000
Interest Expense [1% of Loan Beginning balance]	$                              -	$                                          76	$                                    117
Preliminary Cash balance	$                           400	$                                    3,924	$                              25,883
Additional Loan (Loan repayment)	$                       7,600	$                                    4,076	$                            (11,676)
Ending Cash balance	$                       8,000	$                                    8,000	$                              14,207
Loan balance - Beginning of month	$                              -	$                                    7,600	$                              11,676
Additional loan (repayment)	$                       7,600	$                                    4,076	$                            (11,676)
Loan balance - End of month	$                       7,600	$                                  11,676	$                                       -