Exercise 7-17 (Algo) Preparation of cash budgets (for three periods) LO P2 Kayak Company budgeted the following cash receipts (excluding cash receipts from Igans 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 $ 527,000 410,000 452,000 $473,800 356,800 526,000 Kayak requires a minimum cash balance of $30,000 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 $30,000 is used to repay loans at month-end. 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.) Answer is not complete. KAYAK COMPANY Next Beginning cash balance Add: Cash receipts Total cash available Less: Cash payments for All items excluding interest Interest on loan Total cash payments Preliminary cash balance Loan activity Additional loan (loan repayment) Ending cash balance Loan balance - Beginning of month Additional loan (loan repayment) Loan balance, end of month KAYAK COMPANY Cash Budget C C January February $ 30,000 $ 30,000 527,000 410,000 557,000 440,000 March 473,800 356,800 526,000 600 + 474,400 356,800 526,000 Loan balance $ 60,000 0