Exercise 7-20 Cash budget LO P2

Karim Corp. requires a minimum $10,000 cash balance. If necessary, loans are taken to meet this requirement at a cost of 1% interest per month (paid monthly). Any excess cash is used to repay loans at month-end. The cash balance on July 1 is $10,400 and the company has no outstanding loans. Forecasted cash receipts (other than for loans received) and forecasted cash payments (other than for loan or interest payments) follow.

	July			August			September
Cash receipts	$	26,000		$	34,000		$	42,000
Cash payments		31,000			32,000			34,000

Prepare a cash budget for July, August, and September. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to the nearest whole dollar.)

KARIM CORP.
Cash Budget
For July, August, and September
	July	August	September
Beginning cash balance	$10,400
Total cash available
Preliminary cash balance
Ending cash balance
Loan balance
Loan balance - Beginning of month	$0
Additional loan (loan repayment)
Loan balance - End of month