Exercise $7-17(Algo)$ Preparation $of$ cash budgets $(for$ three periods$)LOP2$

Kayak Company 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.

Cash Receipts Cash payments

January $ $524,000$ $ $470,800$

February $412,500359,300$

March $479,000526,000$

Kayak requires a minimum cash balance $of$ $$40,000at$ each month$-$end. Loans taken $to$ meet this requirement charge $1\%,$ interest per month, paid $at$ each month$-$end. The interest $is$ computed based $on$ the beginning balance $of$ the loan for the month. Any preliminary cash balance above $$40,000is$ used $to$ repay loans $at$ month$-$end. The company has a cash balance $of$ $$40,000$ and a loan balance $of$ $$80,000at$ January $1.$

Prepare monthly cash budgets for January, February, and March.

Note: Negative balances and Loan repayment amounts $(if$ any$)$ should $be$ indicated with minus sign.