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 $ 527,000 $ 470,500 401,000 456,000 344,500 534,000 Kayak requires a minimum cash balance of $30,000 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 $30,000 is used to repay loans at month-end. The company has a cash balance of $30,000 and a loan balance of $60,000 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 Less: Cash payments for All items excluding interest Interest on loan Total cash payments Preliminary cash balance. KAYAK COMPANY Cash Budget $ January 30,000 $ 527,000 557,000 470,500 600 471,100 February + 30,000 401,000 431.000 344,500 344,500 March 456,000 534,000 0 534,000
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 $ 527,000 $ 470,500 401,000 456,000 344,500 534,000 Kayak requires a minimum cash balance of $30,000 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 $30,000 is used to repay loans at month-end. The company has a cash balance of $30,000 and a loan balance of $60,000 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 Less: Cash payments for All items excluding interest Interest on loan Total cash payments Preliminary cash balance. KAYAK COMPANY Cash Budget $ January 30,000 $ 527,000 557,000 470,500 600 471,100 February + 30,000 401,000 431.000 344,500 344,500 March 456,000 534,000 0 534,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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A
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
$ 527,000
401,000
456,000
Cash payments
$ 470,500
Kayak requires a minimum cash balance of $30,000 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 $30,000 is used to repay loans at month-end. The company has a cash balance of $30,000 and a loan balance
of $60,000 at January 1.
Beginning cash balance
Add: Cash receipts
Total cash available
Less: Cash payments for
All items excluding interest
Interest on loan
344,500
534,000
Prepare monthly cash budgets for January, February, and March. (Negative balances and Loan repayment amounts (if any) should
be indicated with minus sign.)
Total cash payments
Preliminary cash balance
KAYAK COMPANY
Cash Budget
$
January
30,000 $
527,000
557,000
470,500
600
471,100
February
30,000
401,000
431,000
344,500
344,500
March
456,000
534,000
0
534,000
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