Exercise $7-17($Algo$)$ Preparation of cash budgets $($for three periods$)$ LO P$2$

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.

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.

Note: Negative balances and Loan repayment amounts $($if any$)$ should be indicated with minus sign.