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. Cash Cash Receipts payments January $524,000 $469,700 February 401,000 346,700 March 470,000 532,000 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 $160,000 at a monthly inte est 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 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 $ 40,000 $ 40,000 524.000 401,000 564,000 441,000 469,700 346,700 470.000 Beginning cash balance Cash receipts Total cash available Cash payments 532,000 DO 1 of 1 SHE Next nterest is computed based on the beginning balance of the loan for the month. The company repays loan principal with any cash in xcess 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 anuary 1 Prepare monthly cash budgets for January, February, and March. (Negative balances and Loan repayment amounts (if any) should se indicated with minus sign.) March 470,000 KAYAK COMPANY Cash Budget For January, February, and March January February Beginning cash balance $ 40,000 $ 40,000 Cash receipts 524,000 401,000 Total cash available 564,000 441,000 Cash payments 469,700 346,700 Interest expense Preliminary cash balance Additional loan (loan repayment) Ending cash balance Loan balance 532,000 $ 80,000 S 0 Loan balance - Beginning of month Additional loan (loan repayment) Loan balance - End of month