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. Cash Receipts Cash payments January February March $ 526,000 411,000 460,000 $ 471,700 356,700 525,000 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 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 February March $ 30,000 $ 30,000 Loan balance $ 60,000
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. Cash Receipts Cash payments January February March $ 526,000 411,000 460,000 $ 471,700 356,700 525,000 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 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 February March $ 30,000 $ 30,000 Loan balance $ 60,000
Chapter6: Managing Cash Flow
Section: Chapter Questions
Problem 1EP
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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.
Cash Receipts Cash payments
January
February
March
$ 526,000
411,000
460,000
$ 471,700
356,700
525,000
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
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
February
March
$
30,000
S
30,000
Loan balance
$
60.000
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