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. January February March Cash Receipts Cash payments $525,000 402,000 470,000 $ 466,300 343,300 527,000 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.) 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 Cash Budget January February March Beginning cash balance Add: Cash receipts Total cash available $ 40,000 $ 40,000 $ 40,000 525,000 402,000 470,000 565,000 442,000 510,000 Less: Cash payments for 466,300 343,300 527,000 Interest on loan 800 Total cash payments 467,100 343,300 527,000 Preliminary cash balance 97,900 Loan activity Ending cash balance Loan balance-Beginning of month Additional loan (loan repayment) Loan balance, end of month Loan balance $ 80,000 $ 0