Karim Corp. requires a minimum $8.200 cash balance. If necessary, loans are take
ID: 2538250 • Letter: K
Question
Karim Corp. requires a minimum $8.200 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 $8,600 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 July August September Cash receipts$24,200 $32,200 $40,200 Cash payments28, 30030,200 32,200 Prepare a cash budget for July. August, and September. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to the nearest whole dollar.) KARIM CORP Cash Budget For July, August, and September July August SeptemberExplanation / Answer
CASH BUDGET FOR JULY, AUGUST AND SEPTEMBER Particulars July August September Beginning Balalnce $ 8,600 $ 8,200 $ 8,200 Cash Receipts $ 24,200 $ 32,200 $ 40,200 Total Cash Available $ 32,800 $ 40,400 $ 48,400 Less: Cash Payments $ 28,300 $ 30,200 $ 32,200 Less : Interest on bank loan $ - $ 37 $ 17.37 Preliminary Cash Balance $ 4,500 $ 10,163 $ 16,183 Additional Loan Payment (Loan Repayment) $ 3,700 $ -1,963 $ -1,737 (8,200- 4500) (10,163-8200) Ending Cash Balance $ 8,200 $ 8,200 $ 14,446 Loan Balance Loan Blance at the beginning of the balance 0 $ 3,700 $ 1,737 Add: Addittional Loan $ 3,700 $ -1,963 $ -1,737 Loan Balance at the end of the month $ 3,700 $ 1,737 $ -
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