Kayak Company budgeted the following cash receipts (excluding cash receipts from loans received) and cash...
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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 $ 520,000 $ 466,800 February 410,000 356,800 March 463,000 532,000 Kayak requires a minimum cash balance of $40,000 at each month-end. Loans taken to meet this requirement charge 1%, interest per month, paid at each month-end. The interest is com
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To prepare the monthly cash budgets for Kayak Company for January February and March we will follow a structured approach Lets break down the calculations step by step Step 1 Starting Information Beginning Cash Balance January 1 40000 Loan Balance January 1 80000 Minimum Cash Balance Requirement 40000 Interest Rate on Loans 1 per month Step 2 Monthly Cash Budget Format The cash budget will include 1 Beginning Cash Balance 2 Cash Receipts 3 Total Cash Available 4 Cash Payments including interest 5 Total Cash Payments 6 Preliminary Cash Balance 7 Loan Activity additional loan or repayment 8 Ending Cash Balance 9 Loan Balance
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