Exercise 7-17 (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. January February March Cash Receipts Cash payments $ 519,000 402,500 454,000 $ 460,300 343,800 526,000 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. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign.) Beginning cash balance Add: Cash receipts Answer is not complete. KAYAK COMPANY Cash Budget January February March $ 40,000 $ 40,000 $ 76,379 519,000 402,500 454,000 ( 559,000 442,500 530,379 Total cash available Less: Cash payments for All items excluding interest 460,300 343,800 526,000 Interest on loan 800 221 Total cash payments 461,100 344,021 526,000 Preliminary cash balance 97,900 98,479 4,379 Loan activity Additional loan (loan repayment) 57,900 22,100 Ending cash balance $ 40,000 $ 76,379 $ 40,000 Loan balance Loan balance - Beginning of month $ 80,000 $ 22,100 $ 0 Additional loan (loan repayment) 57,900 22,100 Loan balance, end of month $ 22,100 $ 0