1 Exercise 07-17 Preparation of cash budgets (for three periods) LO P2 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. 15 points Cash Receipts $524,000 408,500 466,000 Cash payments $467,500 352,000 524,000 January February eBook March Hint According to a credit agreement with its bank, Kayak requires a minimum cash balance of $40,000 at each month-end. In return, the bank has agreed that the company can borrow up to $140,000 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 $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 Ask 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.) Print KAYAK COMPANY References Cash Budget For January, February, and March January February March 40,000 $ Beginning cash balance 40,000 Cash receipts 524,000 466,000 408,500 564,000 Total cash available 448,500 352,000 Cash payments 467,500 524,000 Interest expense 800 243 96,257 95,700 (55,700) 40,000 Preliminary cash balance Additional loan (loan repayment) 15,700 40,000 Ending cash balance Loan balance Loan balance - Beginning of month 80,000 24,300 Additional loan (loan repayment) (55,700) 24,300 $ Loan balance - End of month 24