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 $520,000 404,000 474,000 Cash payments $465, 700 349, 700 526,000 According to a credit agreement with its bank, Kayak requires a minimum cash balance of $30,000 at each month-end. In return, the bank has agreed that the company can borrow up to $160,000 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 $30,000 on the last day of each month. The company has a cash balance of $30,000 and a loan balance of $60,000 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.) For March KAYAK COMPANY Cash Budget ary, February, and March January February $ 30,000 $ 30,000 520,000 404,000 550,000 434,000 465,700 349,700 474,000 Beginning cash balance Cash receipts Total cash available Cash payments Preliminary cash balance Ending cash balance Loan balance $ 60,000 Loan balance - Beginning of month Additional loan (loan repayment) Loan balance - End of month