Karim Corporation requires a minimum $8,000 cash balance. Loans taken to meet this requirement cost 1% interest per month (paid at the end of each month). Any preliminary cash balance above $8,000 is used to repay loans at month-end. The cash balance on July 1 is $8,400, and the company has no outstanding loans. Budgeted cash receipts (other than for loans received) and budgeted cash payments (other than for loan or interest payments) follow. Cash receipts Cash payments Beginning cash balance July $ 20,000 28,000 Total cash available Less: Cash payments for Interest on loan Prepare a cash budget for July, August, and September. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to the nearest whole dollar.) All items excluding interest Total cash payments Preliminary cash balance Loan activity Additional loan (loan repayment) Ending cash balance August $ 26,000 30,000 Loan balance - Beginning of month Additional loan (loan repayment) Loan balance - End of month September $ 40,000 22,000 KARIM CORPORATION Cash Budget $ July Loan balance $ 8,400 $ 20,000 28,400 0 0 0 August 8,000 $ 26,000 34,000 76 September 76 8,000 40,000 48,000 117 117

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…

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…