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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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![Exercise 20-17 (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
January
February
March
Cash Receipts Cash payments
$ 470,900
$ 523,000
406,000
467,000
353,900
536,000
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
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
40,000
Loan balance.
S
00,000
February
March](https://content.bartleby.com/qna-images/question/ac06c900-dc52-42b8-b0c3-6a4d7bd22308/986d7b55-7042-42f9-8936-002b01560170/xiaboz_thumbnail.jpeg)
Transcribed Image Text:Exercise 20-17 (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
January
February
March
Cash Receipts Cash payments
$ 470,900
$ 523,000
406,000
467,000
353,900
536,000
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
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
40,000
Loan balance.
S
00,000
February
March
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- Prepare Cash Budget For 3 Months Brewster Corporation expects the following cash receipts and disbursements during the first quarter of the year (receipts exclude new borrowings and disbursements exclude interest payments on borrowings since January 1) January February March $280,000 $300,000 $270,000 Cash receipts Cash disbursements 260,000 340,000 280,000 The expected cash balance at January 1, is $62,000. Brewster wants to maintain a cash balance at the end of each month of at least $60,000. Short-term borrowings at 1% interest per month will be used to accomplish this, if necessary. Borrowings (in multiples of $1,000) will be made at the beginning of the month in which they are needed, with interest for that month paid at the end of the month. Prepare a cash budget for the quarter ended March 31. Brewster Corporation Cash Budget for the Quarter Ended March 31 January Beginning cash balance Cash receipts Short-term borrowings Cash available Cash disbursements Interest payment Total…arrow_forwardA-2arrow_forward8-19arrow_forward
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