Karim Corp. requires a minimum $8,000 cash balance. Loans taken to meet this requirement cost 1% interest per month (paid at the end of each month). Any preliminary cash balance above $8,000 is used to repay loans at month-end. The cash balance on July 1 is $8,400, and the company has no outstanding loans. Budgeted cash receipts (other than for loans received) and budgeted cash payments (other than for loan or interest payments) follow. Prepare a cash budget for July, August, and September. Round interest payments to the nearest dollar.

Transcribed Image Text:

July August September Cash receipts $20,000 $26,000 $40,000 Cash payments... 28,000 30,000 22,000