According to a credit agreement with its bank, Kayak requires a minimum cash balance of $50,000 at each month-end. In re

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According To A Credit Agreement With Its Bank Kayak Requires A Minimum Cash Balance Of 50 000 At Each Month End In Re 1 (62.56 KiB) Viewed 59 times

According to a credit agreement with its bank, Kayak requires a minimum cash balance of $50,000 at each month-end. In return, the bank has agreed that the company can borrow up to $140,000 at a monthly interest rate of 1%, paid on the last day of each month. The interest is computed based on the beginning balance of the loan for the month. The company repays loan principal with any cash in excess of $50,000 on the last day of each month. The company has a cash balance of $50,000 and a loan balance of $100,000 at January 1. Prepare monthly cash budgets for January, February, and March. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign.) KAYAK COMPANY March 480,000 Cash Budget For January, February, and March January February Beginning cash balance $ 50,000 $ 50,000 Cash receipts 523,000 407,000 Total cash available 573,000 457,000 Cash payments (469,800) (353,800) Interest expense (1,000) (478) Preliminary cash balance 102,200 102,722 Additional loan (loan repayment) (52,200) (52,722) Ending cash balance $ 50,000 $ 50,000 $ (528,000) (49) (1,951) 48,049 50,000 Loan balance Loan balance - Beginning of month $ 100,000 $ 47,800 $ 0 Additional loan (loan repayment) (52,200) 48,049 (52,722) (4.922) Loan balance - End of month S 47,800 $