FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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25
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
$ 523,000
403,500
459,000
$ 469,800
350,300
522,000
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.)
Beginning cash balance
Total cash available
Total cash payments
Preliminary cash balance
Loan activity
KAYAK COMPANY
Cash Budget
January
February
March
$
40,000
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Transcribed Image Text:25 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 $ 523,000 403,500 459,000 $ 469,800 350,300 522,000 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.) Beginning cash balance Total cash available Total cash payments Preliminary cash balance Loan activity KAYAK COMPANY Cash Budget January February March $ 40,000
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