Exercise 07-17 Preparation of cash budgets (for three periods) LO P2 Kayak Co. budgeted the follow ing cash receipts [excluding cash receipts from loans received} and cash payments (excluding cash payments for loan principal and interest payments) for the rst three months of next year. Cash Receipts January $519,660 February 412,660 March 453,866 Cash payments $465,880 353,500 534,000 According to a credit agreement with its bank, Kayak requires a minimum cash balance of $50,000 at each monthend. In return, the bank has agreed that the company can borrow up to $160,000 at a monthly interest rate of1%, paid on the last day of each month. The interest is computed based on the beginning balance ofthe loan for the month. The company repays loan principal with any cash in excess of $50,000 on the last day of each month. The company has a cash balance of $50,000 and a loan balance of $100,000 at January 1. Prepare monthly cash budgets be indicated with minus sign.) for January, February, and March. {Negative balances and Loan repayment amounts {if any] should 0 Answer is not complete. Beginning cash balance 0 50,000 0 5000005 i6,3?9 Cash receipts 519,000 0 412,000 0 453,000 0 Total cash available Cash payments 509,000 452,000 529,309 405,000 0 350.000 0 534.000 0 Interest expense 1,000 0 221 o Preliminary cash balance Additional loan (loan repayment} Ending cash balance X Answer is not complete. KAYAK COMPANY Cash Budget For January, February, and March January February March Beginning cash balance 50,000 $ 50,000 $ 76,379 X Cash receipts V 519,000 412,000 453,000 Total cash available 569,000 462,000 529,379 Cash payments 465,800 358,800 534,000 Interest expense V 1,000 221 X Preliminary cash balance Additional loan (loan repayment) Ending cash balance Loan balance Loan balance - Beginning of month $ 100,000 0 Additional loan (loan repayment) Loan balance - End of month