Chapter 7 Quiz Kayax Co budgesed the following cash recepts (excluding cash rece

Question

Chapter 7 Quiz Kayax Co budgesed the following cash recepts (excluding cash receipts from loans received) and cash payments (excluding cash payments for loan principal and interest peyments) for the first three months of next year Cash Receipts payments anuary$525,00 $470,700 419,5ee 356,200 454,000524,0ee According to a crecit agreement with the company's bank, Kayak promses to have a minimum cash balance of $30,000 a each last day of each month. The interest is computed based on the beginning balance of the loan for the month. The company repays loan inreturn, te bank has agreed that the cmpany can borrow up to $150,000 at a montny interest rate of 1% paid on the pincioal with ery cash in encess of $30,000 on the lest day of each month. The company has a ceuh balance or $30000 and a loan belance of 360,000 at January f Prepare monenly cesh budgets for January. Febnuary, and March (Negative balances and Loan repayment amounts (if any) shoud be indicated with minus sign) Cash Budget For January, February, and Maech Prev 10, 5 Next > O Type hene to sac PrtScn 0

Explanation / Answer

january

$30,000

February

$30,000

March

$77,937

Beginning cash balance

january

$30,000

February

$30,000

March

$77,937

Add: cash receipts $525,000 $410,500 454,000 Total cash available $555,000 $440,500 $531,937 Less : cash payment 470,700 $356,200 524,000 Cash surplus(deficit) $84,300 $84,300 $7,937 Financing: Borrowing(30000-7937) $22,063 Repayments(84300-600 -53700 -6300 Intetest(1%×60000)(1%6300) -$600 -63 Net cash from financing -54,300 -6363 $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(repayments) (53,700) (6,300) $22,063 Loan balance : end of month $6,300 0 $22,063

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