Chapter 7 Quiz Help Save &Exit; Submit Kayak Co. budgeted the following cash rec
ID: 2569510 • Letter: C
Question
Chapter 7 Quiz Help Save &Exit; Submit Kayak Co. budgeted the following cash receipts (excluding cash receipts from loans receivec) and cash peyments (excluding cash payments for loan principal and enerest paymenes) for the fest three months of next year Cash Cash Receipts payments 5525,00 $470,700 56,200 524,000 anuary 416,500 454,00 March According to a credit agreement with the company's bank, Kayak promises to have a minimum cash balance of $30,000 at each month-end In return, the bank has agreed that the company can borrow up to $150,000 at a monthly interest rate of 1%, paid on the ast day of each month. The interest is computed based on the beginning balance of the loan for the month. The compeny repays loen principal with any cash in excess of $30,000 on the last day of each month The company has a cash balance of $30,000 and a loan balance of $60,000 at January 1 Prepare monthiy cash budgets for January, February. and March Oegative balances and Loan repayment amounts or any) should be indicated with minus sign Cash Budget For January, February, and Mareh Beginning cash balance cash available : Prev ofl Next > O Type here to seanch End 7 8 9Explanation / Answer
KAYAK COMPANY Cash Budget For January, February and March January February March Beginning Cash Balance $30,000 $30,000 $77,937 Cash Receipts $525,000 $410,500 $454,000 Total Cash Available $555,000 $440,500 $531,937 Cash Disbursements $470,700 $356,200 $524,000 Interest Expense $600 $63 $0 Preliminary Cash Balance $83,700 $84,237 $7,937 Additional Loan (loan repayment) ($53,700) ($6,300) $22,063 Ending Cash Balance $30,000 $77,937 $30,000 Loan Balance Loan Balance Beginning of month $60,000 $6,300 $0 Additional Loan (loan repayment) ($53,700) ($6,300) $22,063 Loan Balance End of month $6,300 $0 $22,063