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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 Cash Receipts $525,000 400,000 450,000 Cash payments $475,000 350,000 525,000 February March According to a credit agreement with its bank, Kayak requires 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 a monthly interest rate of 1%, 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 $30,000 on the last day of each 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 January, February, and March. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign.) March KAYAK COMPANY Cash Budget For January, February, and March January February Beginning cash balance $ 30,000 $ 30,000 Cash receipts Total cash available Cash payments Interest expense Preliminary cash balance Additional loan (loan repayment) Ending cash balance Loan balance Loan balance - Beginning of month $ 60,000 Additional loan (loan repayment) Loan balance - End of month 0 Electro Company manufactures an innovative automobile transmission for electric cars. Management predicts that ending finished goods inventory for the first quarter will be 90,000 units. The following unit sales of the transmissions are expected during the rest of the year: second quarter, 450,000 units; third quarter, 525,000 units; and fourth quarter, 475,000 units. Company policy calls for the ending finished goods inventory of a quarter to equal 20% of the next quarter's budgeted sales. Prepare a production budget for both the second and third quarters that shows the number of transmissions to manufacture. Answer is complete but not entirely correct. ELECTRO COMPANY Production Budget Second and Third Quarters Second Quarter Budgeted ending inventory (units) 105,000 Budgeted unit sales for quarter 450,000 Required units of available production 555,000 Budgeted beginning inventory (units) 75,000 Units to be produced 480,000 Third Quarter 95,000 525,000 620,000 105,000 515,000