Kayak Co. 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.

According to a credit agreement with the companys bank, Kayak promises to have a minimum cash balance of $30,000 at each month-end. In return, the bank has agreed that the company can borrow up to $150,000 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. The company repays loan principal with any cash in excess of $30,000 on the last day of each month. The company has a cash balance of $30,000 and a loan balance of $60,000 at January 1.

Exercise 20-17 Preparation of cash budgets (for three periods) LO P2 Kayak Co. 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 $525,000 400,000 450,000 Cash payments $475,000 350,000 525, 000 According to a credit agreement with the company's bank, Kayak promises to have a minimum cash balance of $30,000 at each month-end. In return, the bank has agreed that the company can borrow up to $150,000 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. The company repays loan principal with any cash in excess of $30,000 on the last day of each month. 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 complete but not entirely correct. KAYAK COMPANY Cash Budget r January, February, and March January February March Beginning cash balance Cash receipts Total cash available Cash payments Interest expense Preliminary cash balance Additional loan (loan repayment) 49,400 Ending cash balance $ 30,00030,000S 68,906 525,000. 400,00001 450,000 518,906 350,000 525,000 0 9,400 79,506 6,094 36,094 $ 30,000 68,906S 30,000 555,000 430,000 475003 600 494 10,600 Loan balance Loan balance Beginning of month S 60,000 10,600 S Additional loan (loan repayment) Loan balance End of month 0 36,094 36,094 49,400 10,600 $ 10,600$