The value of Loan balance- beginning of month, Additional loan ( loan repayment)

Question

The value of Loan balance- beginning of month, Additional loan ( loan repayment) Loan balance - end of month The value of Loan balance- beginning of month, Additional loan ( loan repayment) Loan balance - end of month Receipts $518,000 January February March $462,600 350,600 526,000 469,000 15 polints According to a credit agreement with the company's bank, Kayak promises to have a minimum cash balance of $40.000 at each month-end. In return, the bank has agreed that the company can borrow up to $150,000 at a monthly interestrate of 1%, paid on the last day of each month. The interest is computed based on the beginning balance of the loan for the month. The company repays loan principal with any cash in excess of $40,000 on the last day of each month. The company has a cash balance of $40,000 and a loan balance of $80,000 at January 1 Hint Ask Print Prepare monthly cash budgets for January February, and March.(Negative balances and Loan repayment amounts of anyshoud be Indicated with minus sign.) KAYAK COMPANY Cash Budget For January, February, and March March Beginning cash balance Cash receipts Total cash available Cash payments 40,000 518,000 558,000 462.600 40.000 406,000 446,000 50.800 nterest expense Preliminary cash balance Addisional loan (loan repayment) Prev 1 of 11 Next > 13

Explanation / Answer

Prepare cash budget :

January February march Beginning cash balance 40000 40000 69746 Cash receipts 518000 406000 469000 Total cash available 558000 446000 538746 Cash payment (462600) (350600) (526000) Interest expenses (800) (254) 0 Preliminary cash balance 94600 95146 12746 Additional loan (loan repayment) (54600) (25400) 27254 Ending cash balance 40000 69746 40000

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