Solution-Prepare monthly cash budgets for each of first

Prepare monthly cash budgets for each of first three months

Assignment Help Accounting Basics

Reference no: EM131727994

Exercise - Preparation of cash budgets

Kayak Co. budgeted the following cash receipts (excluding cash receipts from loans received) and cash disbursements (excluding cash disbursements for loan principal and interest payments) for the first three months of next year.

	Cash Receipts	Cash Disbursements
January	$519,000	$479,000
February	402,000	349,000
March	465,000	529,000

According to a credit agreement with the company's bank, Kayak promises to have a minimum cash balance of $40,000 at each month-end. In return, the bank has agreed that the company can borrow up to $140,000 at an annual interest rate of 12%, 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 principal on the loan with available cash on the last day of each month. The company has a cash balance of $40,000 and a loan balance of $80,000 at January 1.

Prepare monthly cash budgets for each of the first three months of next year. (Amounts to be deducted should be indicated by a minus sign.)

Reference no: EM131727994

Questions Cloud

Prepare the budgets for the fiscal year ending december : ACCT556 Budgeting Project. Prepare the following budgets for the fiscal year ending December 31, 2013, using the provided spreadsheets

A business that continues to operate its domestic factories : A business that continues to operate its domestic factories in order to avoid layoffs rather than shift its production to lower cost facilities overseas

Evaluate the grocery chain claim : Profit Margin. In response to complaints about high prices, a grocery chain runs the following advertising campaign: "If you pay your child $2 to go buy $50.

Discuss various corporate governance reform proposals : critics of the corporation argue for various corporate governance reform proposals to improve the legal, moral, and socially responsible behavior

Prepare monthly cash budgets for each of first three months : Exercise - Preparation of cash budgets. Prepare monthly cash budgets for each of the first three months of next year

Discuss the term social responsibility to business : Which statement is correct regarding the application of the term "social responsibility" to business

What is the profit margin of the company : Total assets are $794,350, total receivables are $145,350, and the debt-equity ratio is .25. What is the company's profit margin? Its total asset turnover?

What was the company cash coverage ratio for the year : Calculating the Cash Coverage Ratio. Delectable Parsnip, Inc.'s, net income for the most recent year was $8,417. The tax rate was 34 percent.

Post the journal entries to the general ledger accounts : In November 2014, after having incorporated Cookie Creations Inc., Natalie begins operations. Prepare journal entries to record the November transactions

User Account

All Pages

Prepare monthly cash budgets for each of first three months

Reference no: EM131727994

Reference no: EM131727994

Questions Cloud

Reviews

Write a Review

Accounting Basics Questions & Answers

How much control does fed have over this longer real rate

Coures:- fundamental accounting principles

Accounting problems

Theory of interest - term structure of interest rates

Write a report on internal controls

Prepare the bank reconciliation for company

Cost-benefit analysis

Theory of interest

Liquidity and profitability

What is the expected risk premium on the portfolio

Simple interest and compound interest

Capm and venture capital

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT