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 its bank, Kayak requires a minimum cash balance of $40,000 at each month-end, In return, the bank has agreed that the company can borrow up to $160,000 at a monthly interest rate of 19%, 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 $40,000 on the last day of each month. The company has a cash balance of $40,000 and a loan balance of $80,00 at January 1. 

Prepare monthly cash budgets for January, February, and March.

January February March Cash Receipts $523,000 404,500 482,000 Cash payments $467,600 349,100 531,000