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 Cash Receipts Cash payments January $ 526,000 $.466,200 February 409,000 349,200 467,000 533,000 Kayak requires a minimum cash balance of $40,000 at each month-end. The company can borrow money 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. 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) March March KAYAK COMPANY Cash Budget January February $ 40,000 $ 40.000 520,000 409,000 566.000 449.000 Beginning cash balance Add: Cash receipts Total cash available Less: Cash payments for All items excluding interest Interest on loon Total cash payments Preliminary cash balance Loan activity 0 0 0 KAYAK COMPANY March Cash Budget January February $ 40,000 $ 40,000 526,000 409,000 566,000 449,000 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 0 0 0 Loan balance $ 80,000 $ 0 Loan balance - Beginning of month Additional loan (loan repayment) Loan balance, end of month