Karim Corp. requires a minimum $9,900 cash balance. If necessary, loans are take

Question

Karim Corp. requires a minimum $9,900 cash balance. If necessary, loans are taken to meet this requirement at a cost of 2% interest per month (paid monthly). Any excess cash is used to repay loans at month-end. The cash balance on July 1 is $10,300 and the company has no outstanding loans. Forecasted cash receipts (other than for loans received) and forecasted cash payments (other than for loan or interest payments) follow. 3 July August ep Cash receipts Cash payments $25,900 $33,900 41,900 30, 850 31,900 33,900 Prepare a cash budget for July, August, and September (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to the nearest whole dollar.)

Explanation / Answer

Cash budget :

July August september Beginning cash balance 10300 4550 9900 Cash receipts 25900 33900 41900 Total cash available 36200 38450 51800 Cash disbursement -30850 -31900 -33900 Interest expense -91 -160 Preliminary cash balance 5350 6459 17740 Loan taken (repaid) 4550 3441 -7840 Ending cash balance 9900 9900 9900 Loan balance Loan balance- Beginning of month 0 4550 7991 Additional loan (loan repayment) 4550 3441 -7840 Loan balance end of month 4550 7991 151

Related Questions

Navigate

• Browse (All)
• Browse K
• Subjects

---

---

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