and cash payments (excluding cash payments for loan principal and interest payments) for the first three months of next year. January February March Cash Receipts Cash payments $ 517,000 409,500 480,000 $ 459,400 351,900 524,000 Kayak requires a minimum cash balance of $40,000 at each month-end. Loans taken to meet this requirement charge 1%, interest per month, paid at each month-end. The interest is computed based on the beginning balance of the loan for the month. Any preliminary cash balance above $40,000 is used to repay loans at month-end. The company has a cash balance of $40,000 and a loan balance of $80,000 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.) Answer is complete but not entirely correct. KAYAK COMPANY Beginning cash balance Add: Cash receipts Cash Budget January February March SA 40,000 $ 40,000 $ 74,168 517,000 409,500 480,000 557,000 449,500 554,168 Total cash available Less: Cash payments for All items excluding interest 459,400 351,900 524,000 Interest on loan 800 232 0 Total cash payments 460,200 352,132 524,000 Preliminary cash balance 96,800 97,368 30,168 Loan activity Additional loan (loan repayment) Ending cash balance Loan balance - Beginning of month Additional loan (loan repayment) Loan balance, end of month 23,200 0 9,832 $ 40,000 $ 74,168 $ 40,000 Loan balance $ 80,000 $ 23,200 $ 0 23,200 0 9,832 $ 23,200 $ 0 $ 9,832