KARIM CORP. Karim Corp. requires a minimum $8,200 cash balance. If necessary, lo
ID: 2519916 • Letter: K
Question
KARIM CORP.
Karim Corp. requires a minimum $8,200 cash balance. If necessary, loans are taken to meet this requirement at a cost of 1% interest per month (paid monthly). Any excess cash is used to repay loans at month-end. The cash balance on July 1 is $8,600 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.
Cash payments
28,300
30,200
32,200
KARIM CORP.
Cash Budget For July, August, and September July August September Beginning cash balance $8,600 Total cash available Preliminary cash balance Ending cash balance Loan balance Loan balance - Beginning of month $0 Additional loan (loan repayment) Loan balance - End of monthExplanation / Answer
KARIM CORP. Cash Budget For July, August, and September July August September Beginning cash balance 8600 8200 8200 Cash receipts 24200 32200 40200 Total cash available 32800 40400 48400 Cash payments 28300 30200 32200 Interest on bank loan 0 37 17 Preliminary cash balance 4500 10163 16183 Additional loan (loan repayment) 3700 -1963 -1737 Ending cash balance 8200 8200 14446 Loan balance Loan balance - Beginning of month 0 3700 1737 Additional loan (loan repayment) 3700 -1963 -1737 Loan balance - End of month 3700 1737 0
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