Exercise 20-17 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. January February March Cash Receipts $517,000 410,500 480,000 Cash payments $464,900 358,400 533,080 According to a credit agreement with its bank, Kayak requires a minimum cash balance of $50.000 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 $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 for January, February, and March (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign.) March Beginning cash balance Cash receipts Total cash available Cash payments Interest expense Preliminary cash balance KAYAK COMPANY Cash Budget For January, February, and March January February $ 50.000 S 50.000 517,000 410,500 567,000 450,500 464,900 (358,400) (1.000) 101,100 480,000 (533.000) 03 Ending cash balance $ 50,000 $ 50,000 Loan balance $ 100.000 $ 0 Loan balance - Beginning of month Additional loan (loan repayment) Loan balance - End of month $ 0