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 Receipts			Cash payments
January	$	521,000		$	464,500
February		412,500			356,000
March		468,000			531,000

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 $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 $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.

Homework Chapter 7 Saved Help Save & Exit Submit Check my work 3 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. 5 points Cash Receipts $521,000 412,500 468,000 January February March Cash payments $464,500 356,000 531,000 eBook Hint Print References 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 $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 $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 $ 40,000 521,000 412,500 561,000 452,500 LARA 5001 1256 0001! 468,000 Beginning cash balance Cash receipts Total cash available Icach navmente 1521 000 Graw Homework Chapter 7 i Saved Help Save & Exit Submit Check my work 3 Prepare monthly cash budgets for January, February, and March. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign.) KAYAK COMPANY 5 points March eBook Hint 468,000 Print Cash Budget For January, February, and March January February Beginning cash balance $ 40,000 $ 40,000 Cash receipts 521,000 412,500 Total cash available 561,000 452,500 Cash payments (464,500) (356,000) Interest expense (800) Preliminary cash balance Additional loan (loan repayment) Ending cash balance Loan balance References (531,000) $ 80,000 $ 0 Loan balance - Beginning of month Additional loan (loan repayment) Loan balance - End of month $ 0 Mc Graw