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 $ 522,000 402,000 465,000 Kayak requires a minimum cash balance of $40,000 at each month-end. Loans taken to meet this requirement charge 1%, Interest per month, pald 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. Note: 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 Interest on loan Ending cash balance Cash payments $ 471,000 351,000 525,000 Loan balance- Beginning of month Additional loan (loan repayment) Loan balance, end of month KAYAK COMPANY Cash Budget $ January 40,000 $ 522,000 562,000 Loan balance $ 0 80,000 February 40,000 $ 402,000 442,000 0 $ March 40,000 465,000 505,000 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 $ 522,000 402,000 465,000 Kayak requires a minimum cash balance of $40,000 at each month-end. Loans taken to meet this requirement charge 1%, Interest per month, pald 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. Note: 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 Interest on loan Ending cash balance Cash payments $ 471,000 351,000 525,000 Loan balance- Beginning of month Additional loan (loan repayment) Loan balance, end of month KAYAK COMPANY Cash Budget $ January 40,000 $ 522,000 562,000 Loan balance $ 0 80,000 February 40,000 $ 402,000 442,000 0 $ March 40,000 465,000 505,000 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
Related questions
Concept explainers
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.
Question
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
$ 522,000
402,000
465,000
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.
Note: 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
Interest on loan
Ending cash balance
Cash payments
$ 471,000
351,000
525,000
Loan balance - Beginning of month
Additional loan (loan repayment)
Loan balance, end of month
KAYAK COMPANY
Cash Budget
$
January
40,000 $
522,000
562,000
Loan balance
$
80,000
February
40,000 $
402,000
442,000
$
March
40,000
465,000
505,000
0
0
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning