Exercise 20-20 (Algo) Cash budget LO P2
Karim Corporation requires a minimum $8,600 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 $8,600 is used to repay loans at month-end. The cash balance on July 1
is $9,000, 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
July
August
September
$ 24,600
$ 32,600
$ 40,600
28,900
30,600
32,600
Prepare a cash budget for July, August, and September.
Note: Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to
the nearest whole dollar.
KARIM CORPORATION
Cash Budget
July
August
September
Beginning cash balance
$ 9,000
Total cash available
Total cash payments
Preliminary cash balance
Loan activity
Ending cash balance
Loan balance
Loan balance - Beginning of month
$ 0
Additional loan (loan repayment)
Loan balance - End of month