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Kayak Company budgeted the following cash receipts (excluding cash receipts from loans received) and cash payments (excluding cash payments for loan principal and interest payments) for the first three months of next year. Cash Receipts Cash payments January February March $ 521,000 401,500 470,000 $ 461,200 341,700 529,000 Kayak requires a minimum cash balance of $50,000 at each month-end. Loans taken to meet this requirement charge 1%, interest per month, paid at each month-end. The interest is computed based on the beginning balance of the loan for the month. Any preliminary cash balance above $50,000 is used to repay loans at month-end. The company has a cash balance of $50,000 and a loan balance of $100,000 at January 1. Prepare monthly cash budgets for January, February, and March. Note: Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Answer is complete but not entirely correct. KAYAK COMPANY Cash Budget January February March Beginning cash balance Add: Cash receipts $ 50,000 $ 50,000 $ 10,992 521,000 401,500 470,000 Total cash available 571,000 451,500 480,992 Less: Cash payments for Interest on loan (1,000) (1,000) 0 All items excluding interest 461,200 341,700 (529,000) Total cash payments 460,200 340,700 (529,000) Preliminary cash balance 109,800 110,192 48,008 Loan activity Additional loan (loan repayment) 59,800 × (39,200) 1,992x Ending cash balance $ 50,000 $ 67,600 $ 50,000 Loan balance Loan balance - Beginning of month Additional loan (loan repayment) Loan balance, end of month $ 100,000 $ 40,200 $ 0 $ 59,800 40,200 $ (39,200) 1,992 0 $ 1,992

Kayak Company budgeted the following cash receipts (excluding cash receipts from loans received) and cash payments (excluding cash payments for loan principal and interest payments) for the first three months of next year. Cash Receipts Cash payments January February March $ 521,000 401,500 470,000 $ 461,200 341,700 529,000 Kayak requires a minimum cash balance of $50,000 at each month-end. Loans taken to meet this requirement charge 1%, interest per month, paid at each month-end. The interest is computed based on the beginning balance of the loan for the month. Any preliminary cash balance above $50,000 is used to repay loans at month-end. The company has a cash balance of $50,000 and a loan balance of $100,000 at January 1. Prepare monthly cash budgets for January, February, and March. Note: Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Answer is complete but not entirely correct. KAYAK COMPANY Cash Budget January February March Beginning cash balance Add: Cash receipts $ 50,000 $ 50,000 $ 10,992 521,000 401,500 470,000 Total cash available 571,000 451,500 480,992 Less: Cash payments for Interest on loan (1,000) (1,000) 0 All items excluding interest 461,200 341,700 (529,000) Total cash payments 460,200 340,700 (529,000) Preliminary cash balance 109,800 110,192 48,008 Loan activity Additional loan (loan repayment) 59,800 × (39,200) 1,992x Ending cash balance $ 50,000 $ 67,600 $ 50,000 Loan balance Loan balance - Beginning of month Additional loan (loan repayment) Loan balance, end of month $ 100,000 $ 40,200 $ 0 $ 59,800 40,200 $ (39,200) 1,992 0 $ 1,992

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter8: Budgeting
Section: Chapter Questions
Problem 20E
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Kayak Company budgeted the following cash receipts (excluding cash receipts from loans received) and cash payments (excluding cash payments for loan principal and interest payments) for the first three months of next year. Cash Receipts Cash payments January February March $ 521,000 401,500 470,000 $ 461,200 341,700 529,000 Kayak requires a minimum cash balance of $50,000 at each month-end. Loans taken to meet this requirement charge 1%, interest per month, paid at each month-end. The interest is computed based on the beginning balance of the loan for the month. Any preliminary cash balance above $50,000 is used to repay loans at month-end. The company has a cash balance of $50,000 and a loan balance of $100,000 at January 1. Prepare monthly cash budgets for January, February, and March. Note: Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Answer is complete but not entirely correct. KAYAK COMPANY Cash Budget January February March Beginning cash balance Add: Cash receipts $ 50,000 $ 50,000 $ 10,992 521,000 401,500 470,000 Total cash available 571,000 451,500 480,992 Less: Cash payments for Interest on loan (1,000) (1,000) 0 All items excluding interest 461,200 341,700 (529,000) Total cash payments 460,200 340,700 (529,000) Preliminary cash balance 109,800 110,192 48,008 Loan activity Additional loan (loan repayment) 59,800 × (39,200) 1,992x Ending cash balance $ 50,000 $ 67,600 $ 50,000 Loan balance Loan balance - Beginning of month Additional loan (loan repayment) Loan balance, end of month $ 100,000 $ 40,200 $ 0 $ 59,800 40,200 $ (39,200) 1,992 0 $ 1,992
Transcribed Image Text:Kayak Company budgeted the following cash receipts (excluding cash receipts from loans received) and cash payments (excluding cash payments for loan principal and interest payments) for the first three months of next year. Cash Receipts Cash payments January February March $ 521,000 401,500 470,000 $ 461,200 341,700 529,000 Kayak requires a minimum cash balance of $50,000 at each month-end. Loans taken to meet this requirement charge 1%, interest per month, paid at each month-end. The interest is computed based on the beginning balance of the loan for the month. Any preliminary cash balance above $50,000 is used to repay loans at month-end. The company has a cash balance of $50,000 and a loan balance of $100,000 at January 1. Prepare monthly cash budgets for January, February, and March. Note: Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Answer is complete but not entirely correct. KAYAK COMPANY Cash Budget January February March Beginning cash balance Add: Cash receipts $ 50,000 $ 50,000 $ 10,992 521,000 401,500 470,000 Total cash available 571,000 451,500 480,992 Less: Cash payments for Interest on loan (1,000) (1,000) 0 All items excluding interest 461,200 341,700 (529,000) Total cash payments 460,200 340,700 (529,000) Preliminary cash balance 109,800 110,192 48,008 Loan activity Additional loan (loan repayment) 59,800 × (39,200) 1,992x Ending cash balance $ 50,000 $ 67,600 $ 50,000 Loan balance Loan balance - Beginning of month Additional loan (loan repayment) Loan balance, end of month $ 100,000 $ 40,200 $ 0 $ 59,800 40,200 $ (39,200) 1,992 0 $ 1,992
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