FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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i do not understand why the loan payment amount is wrong

Beginning cash balance
Add: Cash receipts
Total cash available
Add: Cash payments for
All items excluding interest
Interest on loan
Total cash payments
Preliminary cash balance
Loan activity
Additional loan (loan repayment)
Ending cash balance
Loan balance - Beginning of month
Additional loan (loan repayment)
Loan balance, end of month
> Answer is not complete.
KAYAK COMPANY
Cash Budget
X
S
S
January
GA
40,000
524,000
564,000
466,400
800
467,200
96,800
Loan balance
$
56,800 X
40,000
80,000
56,800
23,200
February
$ 40,000
404,500
444,500
$
346,900
346,900
23,200 $
GA
March
458,000
521,000
521,000
0
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Transcribed Image Text:Beginning cash balance Add: Cash receipts Total cash available Add: Cash payments for All items excluding interest Interest on loan Total cash payments Preliminary cash balance Loan activity Additional loan (loan repayment) Ending cash balance Loan balance - Beginning of month Additional loan (loan repayment) Loan balance, end of month > Answer is not complete. KAYAK COMPANY Cash Budget X S S January GA 40,000 524,000 564,000 466,400 800 467,200 96,800 Loan balance $ 56,800 X 40,000 80,000 56,800 23,200 February $ 40,000 404,500 444,500 $ 346,900 346,900 23,200 $ GA March 458,000 521,000 521,000 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
$ 524,000
404,500
458,000
Cash payments
$ 466,400
346,900
521,000
Kayak requires a minimum cash balance of $40,000 at each month-end. The company can borrow money at a monthly interest rate of
1%, paid on the last day of each month. 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.)
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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 $ 524,000 404,500 458,000 Cash payments $ 466,400 346,900 521,000 Kayak requires a minimum cash balance of $40,000 at each month-end. The company can borrow money at a monthly interest rate of 1%, paid on the last day of each month. 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.)
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