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Kayak Co budgeted the following cash receipts (excluding cash receipts from loans received) and cash payments (excluding cash payments for loan principal and interest payments) for the first three months of next year January February March Cash Receipts $526,000 401,000 479,000 Cash payments $473,900 348,900 527,000 According to a credit agreement with its bank, Kayak requires a minimum cash balance of $30,000 at each month-end. In return, the bank has agreed that the company can borrow up to $160,000 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 excess of $30,000 on the last day of each month. The company has a cash balance of $30,000 and a loan balance of $60,000 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.) March 479,000 KAYAK COMPANY Cash Budget For January, February, and March January February Beginning cash balance $ 30,000 $ 30,000 Cash receipts 526,000 401,000 Total cash available 556,000 431,000 Cash payments 473.900 348,900 Interest expense 800 Preliminary cash balance Additional loan (loan repayment) Ending cash balance S 30,000 Loan balance Loan balance - Beginning of month $ 60,000 Additional loan (loan repayment) Loan balance - End of month 527,000 0 $ 0 Hardy Company's cost of goods sold is consistently 70% of sales. The company plans ending merchandise Inventory for each month equal to 30% of the next month's budgeted cost of goods sold. All merchandise is purchased on credit, and 40% of the purchases made during a month is paid for in that month Another 45% is paid for during the first month after purchase, and the remaining 15% is paid for during the second month after purchase Expected sales are August (actual). $375,000, September (actual). $350,000, October (estimated). $270,000, and November (estimated). $400,000. Use this information to determine October's expected cash payments for purchases. Calculate Monthly Purchases: August September October November 105,000 Budgeted ending inventory Cost of goods sold (estimated) Required available inventory Budgeted beginning inventory Required purchases $ 0 S 0 $ 0 Calculate Payments Made for Inventory: Purchases paid in September October Purchases August After October August purchases September purchases October purchases Determine October's Expected Cash Payments for Purchases. October's expected cash payments for purchases

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