Kasik Co. budgeted the following cash receipts and cash disbursements for the first three months of next year.
| Cash Receipts | Cash Disbursements |
January | $500,000 | $450,000 |
February | 300,000 | 250,000 |
March | 400,000 | 500,000 |
According to a credit agreement with the company’s bank, Kasik 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 $150,000 at an annual interest rate of 12%, 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 has a cash balance of $30,000 and a loan balance of $60,000 at January 1. Prepare monthly cash budgets for each of the first three months of next year.
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