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. January February March Cash Receipts Cash payments $ 518,000 400,500 458,000 $ 459,300 341,800 535,000 Kayak requires a minimum cash balance of $40,000 at each month-end. Loans taken to meet this requirement charge 1%, interest per month, paid at each month-end. 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.) Beginning cash balance Add: Cash receipts Total cash available Total cash payments Preliminary cash balance Loan activity Ending cash balance Loan balance - Beginning of month Additional loan (loan repayment) Loan balance, end of month KAYAK COMPANY Cash Budget January February March $ 40,000 $ 40,000 518,000 400,500 458,000 558,000 440,500 0 0 0 Loan balance $ 80,000 $ 0
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. January February March Cash Receipts Cash payments $ 518,000 400,500 458,000 $ 459,300 341,800 535,000 Kayak requires a minimum cash balance of $40,000 at each month-end. Loans taken to meet this requirement charge 1%, interest per month, paid at each month-end. 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.) Beginning cash balance Add: Cash receipts Total cash available Total cash payments Preliminary cash balance Loan activity Ending cash balance Loan balance - Beginning of month Additional loan (loan repayment) Loan balance, end of month KAYAK COMPANY Cash Budget January February March $ 40,000 $ 40,000 518,000 400,500 458,000 558,000 440,500 0 0 0 Loan balance $ 80,000 $ 0
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter8: Budgeting
Section: Chapter Questions
Problem 20E
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text: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.
January
February
March
Cash Receipts Cash payments
$ 518,000
400,500
458,000
$ 459,300
341,800
535,000
Kayak requires a minimum cash balance of $40,000 at each month-end. Loans taken to meet this requirement charge 1%, interest
per month, paid at each month-end. 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.)
Beginning cash balance
Add: Cash receipts
Total cash available
Total cash payments
Preliminary cash balance
Loan activity
Ending cash balance
Loan balance - Beginning of month
Additional loan (loan repayment)
Loan balance, end of month
KAYAK COMPANY
Cash Budget
January
February
March
$
40,000
$
40,000
518,000
400,500
458,000
558,000
440,500
0
0
0
Loan balance
$
80,000
$
0
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