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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 $ 516,000 411,000 472,000 $ 463,900 358,900 528,000 Kayak requires a minimum cash balance of $40,000 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 $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 Add: Cash receipts Total cash available Less: Cash payments for Cash payments Interest on loan Total cash payments KAYAK COMPANY Cash Budget January February March $ 40,000 $ 40,000 $ 40,000 516,000 411,000 472,000 556,000 451,000 512,000 463,900 358,000 528,000 800 0 464,700 358,000 528,000 Preliminary cash balance Loan activity Additional loan (loan repayment) Ending cash balance Loan balance Loan balance - Beginning of month $ 80,000 $ 800 $ 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 Cash payments $ 516,000 411,000 472,000 $ 463,900 358,900 528,000 Kayak requires a minimum cash balance of $40,000 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 $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 Add: Cash receipts Total cash available Less: Cash payments for Cash payments Interest on loan Total cash payments KAYAK COMPANY Cash Budget January February March $ 40,000 $ 40,000 $ 40,000 516,000 411,000 472,000 556,000 451,000 512,000 463,900 358,000 528,000 800 0 464,700 358,000 528,000 Preliminary cash balance Loan activity Additional loan (loan repayment) Ending cash balance Loan balance Loan balance - Beginning of month $ 80,000 $ 800 $ 0

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter8: Budgeting
Section: Chapter Questions
Problem 20E
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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 $ 516,000 411,000 472,000 $ 463,900 358,900 528,000 Kayak requires a minimum cash balance of $40,000 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 $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 Add: Cash receipts Total cash available Less: Cash payments for Cash payments Interest on loan Total cash payments KAYAK COMPANY Cash Budget January February March $ 40,000 $ 40,000 $ 40,000 516,000 411,000 472,000 556,000 451,000 512,000 463,900 358,000 528,000 800 0 464,700 358,000 528,000 Preliminary cash balance Loan activity Additional loan (loan repayment) Ending cash balance Loan balance Loan balance - Beginning of month $ 80,000 $ 800 $ 0
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 Cash payments $ 516,000 411,000 472,000 $ 463,900 358,900 528,000 Kayak requires a minimum cash balance of $40,000 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 $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 Add: Cash receipts Total cash available Less: Cash payments for Cash payments Interest on loan Total cash payments KAYAK COMPANY Cash Budget January February March $ 40,000 $ 40,000 $ 40,000 516,000 411,000 472,000 556,000 451,000 512,000 463,900 358,000 528,000 800 0 464,700 358,000 528,000 Preliminary cash balance Loan activity Additional loan (loan repayment) Ending cash balance Loan balance Loan balance - Beginning of month $ 80,000 $ 800 $ 0
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