D Assignment- Ch. 20X C O ezto.mheducation.com/hm.tpx velue: 4.00 points Karim C

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D Assignment- Ch. 20X C O ezto.mheducation.com/hm.tpx velue: 4.00 points Karim Corp. requires a minimum $8,000 cash balance. If necessary, loans are taken to meet this requirement at a cost of 1% interest per month (paid monthly) Any excess cash is used to repay loans at month-end. The cash balance on July 1 is $8,400 and the company has no outstanding loans. Forecasted cash receipts (other than for loans received) and forecasted cash payments (other than for loan or interest payments) follow Cash receipts Cash disbursements $24,000 $32,000 40,000 28,00030,00032,000 Prepare a cash budget for July, August, and September. (Rounding your final answers to the nearest whole dollar. Negative balance and Loan repayment amount should be indicated with minus sign.) KARIM CORP Cash Budget For July, August, and September July AugustSeptember 8,400 S 24,000 32,400 28,000 Beginning cash balance 8,200 S 32,000 40.200 30,000 8,200 40,000 48,200 32,000 receipts Total cash available Cash disbursements Interest on bank loan Preliminary cash balance Additional loan (loan repayment) Ending cash balance Loan balance Loan balance- Beginning of monthS Additional loan (loan repayment) Loan balance- End of month Type here to search

Explanation / Answer

The cash budget along with loan balance is shown as follows:-

  KARIM CORP.

  Cash Budget

For July, August, and September (Amounts in $)

Beginning Cash Balance 8,400 8,000 8,000 Add: Cash Receipts 24,000 32,000 40,000 Total Cash Available 32,400 40,000 48,000 Less: Cash disbursements (28,000) (30,000) (32,000) Less: Interest on Bank Loan (0) (36) (16) Preliminary Cash Balance 4,400 9,964 15,984 Additional Loan (loan repayment) 3,600 (1,964) (1,636) Ending Cash Balance 8,000 8,000 14,348 Loan balance Loan balance - Beginning of month (A) 0 3,600 1,636 Additional loan (loan repayment) (8,000 minimum cash - preliminary cash balance) 3,600 (1,964) (1,636) Loan balance - End of month 3,600 1,636 0 Interest on loan (A*1% per month) 0 36 16

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