Exercise 20-17 (Algo) Preparation of cash budgets (for three periods) LO P2 Kayak Company 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 February March $ 527,000 409,000 464,000 $ 472,700 354,700 532,000 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.) Beginning cash balance Add: Cash receipts Total cash available Less: Cash payments for Interest on loan KAYAK COMPANY Cash Budget January February March $ 40,000 527,000 567,000 9 8.33 points Beginning cash balance Add: Cash receipts Total cash available Less: Cash payments for Interest on loan KAYAK COMPANY Cash Budget eBook Hint Print References Total cash payments Preliminary cash balance Loan activity Ending cash balance Loan balance - Beginning of month Additional loan (loan repayment) Loan balance, end of month January February March $ 40,000 527,000 567,000 0 0 0 Loan balance $ 80,000 0