Help Save& Exit Submit aster Budget xercise 4 Kayak Co budgeted the following ca

Question

Help Save& Exit Submit aster Budget xercise 4 Kayak Co budgeted the following cash receipts (excluding payments for loan principal and interest payments) for the first three months of next year cash receipts from loans received) and cash payments (excluding cash 350,00 According to a credit agreement with the company's bank, Kayak promises to have a minimum cash balance of $30,000 at each month-end In return, the bank has agreed that the company can borrow up to $150,000 at a monthly interest rate of h, paid on the ast day of each month. The interest is computed based on the beginning balance of the loan for the month. The company repays loan balance of $60,000 at January 1 Prepare monthly cash budgets for January. February, and March (Negative balances and Loan repayment amounts of any) should principal with any cash in excess of $30,000 on the last day of each month. The company has a cash balance of $30,000 and a loan be indicated with minus sign) Cash Budget For January. February, and March Beginning cash balance Total cash availabe

Explanation / Answer

Kayak Company

Cash Budget

For January, February and March.

January

February

March

Cash Balance Beginning

$    30,000.00

$        30,000.00

$         69,294.00

Add: Cash Receipts

$ 525,000.00

$      400,000.00

$      450,000.00

Total Cash Available

$ 555,000.00

$      430,000.00

$      519,294.00

Deduct: Cash Payments

$ 475,000.00

$      350,000.00

$      325,000.00

Excess (deficiency) of cash

$    80,000.00

$        80,000.00

$      194,294.00

Financing

     Borrowing

$                   -  

$                       -  

$                        -  

     repayments

$ (49,400.00)

$      (10,600.00)

$                        -  

     Interest Payment

$        (600.00)

$            (106.00)

$                        -  

Cash Balance Ending

$    30,000.00

$        69,294.00

$      194,294.00

Borrowings

Beginning Balance

$    60,000.00

$        10,600.00

$                        -  

Repayments

$ (49,400.00)

$      (10,600.00)

$                        -  

Addition in loan

$                   -  

$                       -  

$                        -  

Closing Balance

$    10,600.00

$                       -  

$                        -  

Interest of $600 is paid for loan balance of $60000 on January 1st , Similarly interest is calculated in the month of February.

Loan could be paid in full in the month of January but the closing balance of cash would go below $30000, This is why only 49400 is paid so that minimum balance is maintained.

Kayak Company

Cash Budget

For January, February and March.

January

February

March

Cash Balance Beginning

$    30,000.00

$        30,000.00

$         69,294.00

Add: Cash Receipts

$ 525,000.00

$      400,000.00

$      450,000.00

Total Cash Available

$ 555,000.00

$      430,000.00

$      519,294.00

Deduct: Cash Payments

$ 475,000.00

$      350,000.00

$      325,000.00

Excess (deficiency) of cash

$    80,000.00

$        80,000.00

$      194,294.00

Financing

     Borrowing

$                   -  

$                       -  

$                        -  

     repayments

$ (49,400.00)

$      (10,600.00)

$                        -  

     Interest Payment

$        (600.00)

$            (106.00)

$                        -  

Cash Balance Ending

$    30,000.00

$        69,294.00

$      194,294.00

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.