Kayak Co budgeted the following cash receipts excluding cash

Kayak Co. budgeted the following cash receipts (excluding cash receipts from loans received) and cash disbursements (excluding cash disbursements for loan principal and interest payments) for the first three months of next year. January February March Cash Receipts $523,000 407,500 474,000 Cash Disbursements $475,000 356,000 529,000 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 an annual interest rate of 12%, 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 available cash 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. Prepare monthly cash budgets for each of the first three months of next year. (Be certain to enter \"0\" wherever required. Negative balance and Loan repayment amount should be indicated with minus sign.) KAYAK COMPANY Cash Budget For January, February, and March January February March Beginning cash balance $ 40,000 $ 40 000 40,000: Cash receipts 523,000 407,500 474,000 Total cash available 563,000 447,500 Cash disbursements 475,000 356,000 529,000 Interest expense 800 Preliminary cash balance Additional loan (loan repayment) Ending cash balance Loan balance Loan balance - Beginning of month 80,000 Additional loan (loan repayment) Loan balance - End of month S

Solution

Kayak Company Cash Budget For the three months ending March31st Months January February March Cash Balance $                    40,000.00 $         40,000.00 $          58,380.00 Add: Collections from customer $                  523,000.00 $       407,500.00 $        474,000.00 Total Cash available=(A) $                  563,000.00 $       447,500.00 $        532,380.00 Cash Disbursemenr=(B) $                  475,000.00 $       356,000.00 $        529,000.00 Interest Expense=(C ) January=($80000*1%) $                          800.00 February=($32100*1%) $               320.00 Preliminary Cash Balance=(A)-(B)-( C ) $                    87,200.00 $         91,180.00 $             3,380.00 Additional loan from bank $          40,000.00 Repayment of loan to bank $                    47,200.00 $         32,800.00 Cash Balance ,ending $                    40,000.00 $         58,380.00 $          43,380.00 Kayak Company Loan Balance Month January February March Loan Balance -Beginning Balance $                    80,000.00 $         32,800.00 $                          -   Additional Loan(Loan repayment) $                  (47,200.00) $       (32,800.00) $          40,000.00 Loan Balance-Ending Balance $                    32,800.00 $                        -   $          40,000.00