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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 $ 525,000 $ 465,200 February 404,000 344,200 March 479,000 525,000 Kayak requires a minimum cash balance of $30,000 at each month-end. Loans taken to meet this requirement charge 1%, interest month, paid at each month-end. The interest is computed based on the beginning balance of the loan for the month. Any prelimina 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 balanc 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.) a March 479,000 Answer is not complete. KAYAK COMPANY Cash Budget January February Beginning cash balance 30,000 30,000 Add: Cash receipts 525,000 404,000 Total cash available 555,000 434,000 Less: Cash payments for Interest on loan 600 8 All items excluding interest 465,200 344,200 Total cash payments 465,800 344,208 Preliminary cash balance 89,200 89,792 Loan activity Additional loan (loan repayment) (59,200) Ending cash balance S 30,000 30,000 Loan balance Loan balance - Beginning of month S 60,000 $ 800 Additional loan (loan repayment) (59,200) Loan balance, end of month $ 800 SIS 525,000 525,000 $ 0