mn.3 Kayak requires a minimum cash balance of $40,000 at each month-end. Loans taken to meet this requirement charge 1%, interest permonth, paid at each month-end. The interest is computed based on the beginning balance of the loan for the month. Any preliminarycash balance above $40,000 is used to repay loans at month-end. The company has a cash balance of $40,000 and a loan balanceof $80,000 at January 1.Prepare monthly cash budgets for January, February, and March. (Negative balances and Loan repayment amounts (if any) shouldbe indicated with minus sign.)Beginning cash balanceAdd: Cash receiptsTotal cash availableKAYAK COMPANYCash BudgetJanuaryFebruaryMarch$40,000$40,000 $74,168522,000400,500467,000562,000440,500541,168Less: Cash payments forInterest on loan(800)(232)0All items excluding interest464,400342,900526,000Total cash payments463,600342,668526,000Preliminary cash balance96,80097,368Loan activityAdditional loan (loan repayment)Ending cash balanceLoan balance - Beginning of monthAdditional loan (loan repayment)Loan balance, end of month(56,800)(23,200)$40,000 $74,168 $40,000Loan balance$80,000 $(56,800)23,200 $(23,200)0$23,200 $0

Cash budget is a statement that shows estimated cash receipts and cash payments for a particular…

Answered: Kayak requires a minimum cash balance…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Prime Products hopes to borrow $87,000 on April 1 and repay it plus interest of $1,220 on June 30. The following data are available for the months April through June, during which the loan will be used: a. On April 1, the start of the loan period, the cash balance will be $39,000. Accounts receivable on April 1 will total $170,800, of which $146,400 will be collected during April and $19,520 will be collected during May. The remainder will be uncollectible. b. The company estimates 30% of a month's sales are collected in the month of sale, 60% in the month following sale, and 8% in the second month following sale. The other 2% are bad debts that are never collected. Budgeted sales and expenses for the three- month period follow: Sales (all on account) Merchandise purchases Payroll Lease payments Advertising Equipment purchases Depreciation Required 1 Required 2 April $ 242,000 $ 213,000 $ 19,600 $ 29,200 $ 62,600 - Beginning cash balance Add receipts: Collections from customers May $…
Prime Products hopes to borrow $51,000 on April 1 and repay it plus interest of $860 on June 30. The following data are available for the months April through June, during which the loan will be used: a. On April 1, the start of the loan period, the cash balance will be $24,400. Accounts receivable on April 1 will total $151,200, of which $129,600 will be collected during April and $17,280 will be collected during May. The remainder will be uncollectible. b. The company estimates 30% of a month's sales are collected in the month of sale, 60% in the month following sale, and 8% in the second month following sale. The other 2% are bad debts that are never collected. Budgeted sales and expenses for the three- month period follow: Sales (all on account) Merchandise purchases Payroll Lease payments April $285,000 $194,000 May $ 548,000 June $ 251,000 $ 179,000 $ 171,000 $ 35,400 $ 35,400 $ 19,900 $ 35,800 $ 35,800 $ 35,800 Advertising Equipment purchases Depreciation $ 64,400 $ 64,400 $…
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 $ 517,000 409,500 480,000 $ 459,400 351,900 524,000 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.) Answer is complete but not entirely correct. KAYAK COMPANY Beginning cash balance Add: Cash receipts Cash Budget January February March SA 40,000 $ 40,000 $ 74,168 517,000 409,500 480,000 557,000 449,500…
Calculate the monthly finance charge for the credit card transaction. Assume that it takes 10 days for a payment to be received and recorded, and that the month is 30 days long. $400 balance, 14%, $100 payment, previous balance method
Assume that you start with a balance of $3900 on your credit card.During the first month you charge $400. During the second month you charge $650 and make a payment of $280. Assume that your credit card charges a 29% APR and each month you make the minimum payment of 2.5% of the balance. Complete the following table. Round your answer to the nearest cent. Month 1 Previous balance- $3900 Finance charge- $94.25 Purchase- 400 Payment ?97.50 New balance? Month 2 Previous balance- finance charge- purchase- payments- New balance
Calculate the monthly finance charge for the credit card transaction. Assume that it takes 10 days for a payment to be received and recorded, and that the month is 30 days long. (Round your answer to the nearest cent.) $475 balance, 16%, $425 payment; average daily balance method
Calculate the monthly finance charge for the credit card transaction. Assume that it takes 10 days for a payment to be received and recorded, and that the month is 30 days long. (Round your answers to the nearest cent.) $8,000 balance, 15%, $20 payment (a) previous balance method$ (b) adjusted balance method$ (c) average daily balance method$
On August 1, a firm assigned $220,000 of its $580,000 of accounts receivable. The finance company advances 85% of the assigned accounts less a $22,000 fee. Interest is 10% and payable monthly on the beginning-of-period loan balance. A loan payment is remitted at the end of each month. Each payment includes principal and interest. The amount of each loan payment equals the cash collected on receivables during the month plus interest on the loan balance. If $100,000 was collected on accounts receivable during August, on the first loan payment, how much should be debited to Interest Expense?
You have a carry-over balance of $450 of credit card charges with no additional charges and you plan to just pay the minimum payment each month for the next two months. The Annual Percentage Rate (APR) is 15.99% and the minimum payment each month is 4% of the balance. Determine the finance charge, new balance, and minimum payment required for each of the next two months, and the carry over balance for month 3 in the table below: (round all answers to the nearest cent) Month Carry over Balance Finance charge new balance minium payment 1 450.00 2 3
A loan with payments of $900 due at the end of each month (except for a smaller final payment) was registered with a starting balance of $25,000. The loan has a semiannually compounded rate of return of 3.2%. What will be the final payment? Please answer with details and no plagiarism i give positive rating.
Calculate the monthly finance charge for the credit card transaction. Assume that it takes 10 days for a payment to be received and recorded, and that the month is 30 days long. (Round your answers to the nearest cent.) $9,000 balance, 13%, $60 payment
Calculate the monthly finance charge for the credit card transaction. Assume that it takes 10 days for a payment to be received and recorded, and that the month is 30 days long. (Round your answers to the nearest cent.) $4000 balance, 16%, $2,500 payment (a) previous balance method(b) adjusted balance method (c) average daily balance method

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