Karim Corp. requires a minimum $8,000 cash balance. Loans taken to meet this requirement cost 1% interest per month (paid monthly). Any excess cash is used to repay loans at month-end. The cash balance on July 1 is $8,400, and the company has no outstanding loans. Forecasted cash receipts (other than for loans received) and forecasted cash payments (other than for loan or interest payments) follow. July August September Cash receipts$20,000 $26,000 $40,000 Cash payments 28,000 30,000 22,000

Respuesta :

Answer:

a. Ending Cash balances:

July = $8,000

August = $8,000

September = $14,207

b. Ending Loan balances:

July = $7,600

August = $11,676

September = $0

Explanation:

Find attached the excel file for the full cash budget for July, August and September.

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