Answer Happy

Karim Corporation requires a minimum $9,600 cash balance. Loans taken to meet this requirement cost 1% interest per month (paid at the end of each month). Any preliminary cash balance above $9,600 is used to repay loans at month-end. The cash balance on July 1 is $10,000, and the company has no outstanding loans. Budgeted cash receipts (other than for loans received) and budgeted cash payments (other than for loan or interest payments) follow. Cash receipts Cash payments Beginning cash balance Total cash available 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.) Total cash payments Preliminary cash balance Loan activity July $ 25,600 30,400 Ending cash balance August $ 33,600 31,600 Loan balance - Beginning of month Additional loan (loan repayment) Loan balance - End of month September $ 41,600 33,600 KARIM CORPORATION Cash Budget $ July Loan balance $ 10,000 0 0 August 0 September 0