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	$ 523,000	$ 465,400
February	401,500	343,900
March	465,000	529,000

Kayak requires a minimum cash balance of $40,000 at each month-end. The company can borrow money 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. 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.)

KAYAK COMPANY Cash Budget January S 40,000 February March Beginning cash balance Total cash available Total cash payments Preliminary cash balance Loan activity Ending cash balance Loan balance $ 80,000 Loan balance - Beginning of month Additional loan (loan repayment) Loan balance, end of month