Karim Corp. requires a minimum $9,200 cash balance. If necessary, loans are taken to meet this...

Karim Corp. requires a minimum $9,200 cash balance. If necessary, loans are taken to meet this requirement at a cost of 1% interest per month (paid monthly). Any excess cash is used to repay loans at month-end. The cash balance on July 1 is $9,600 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	$ 25,200	$ 33,200	$ 41,200
Cash Payments	$ 29,800	$ 31,200	$ 33,200

Prepare a cash budget for July, August, and September. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to the nearest whole dollar.)

KARIM CORP.

Cash Budget

For July, August, and September

	July	August	September
Beginning cash balance	$ 9,600	$ 9,200	$ 9,200
Cash Receipts	25,200	33,200	41,200
Total cash available	34,800	42,400	50,400
Cash payments	(29,800)	(31,200)	(33,200)
Interest on bank loans
Preliminary cash balance
Additional loan (loan repayment)

Ending cash balance

9,200

----------

Loan balance

Loan balance - Beginning of month	$	$	$
Additional loan (loan repayment)
Loan balance - End of month

NOTE: Apologies for the formatting. I created tables instead of copy and pasting from the program.

Expert Solution

ekkarill92 answered 10 months ago

Karim Corp. requires a minimum $8,200 cash balance. Loans taken to meet this requirement cost 1%...

Karim Corp. requires a minimum $8,200 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 $8,600, 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 $ 24,200 $ 32,200 $ 40,200 Cash payments 28,300...

Foyert Corp. requires a minimum $7,600 cash balance. If necessary, loans are taken to meet this...

Foyert Corp. requires a minimum $7,600 cash balance. If necessary, loans are taken to meet this requirement at a cost of 1% interest per month (paid monthly). Any excess cash is used to repay loans at month-end. The cash balance on October 1 is $7,600 and the company has an outstanding loan of $3,600. Forecasted cash receipts (other than for loans received) and forecasted cash payments (other than for loan or interest payments) follow. October November December Cash receipts...

The Karim, Lina, and Mazen partnership had the following balance sheet just before entering liquidation: Cash...

The Karim, Lina, and Mazen partnership had the following balance sheet just before entering liquidation: Cash $10,000 Noncash 300,000 Liabilities 130,000 Karim capital 60,000 Lina capital 40,000 Mazen Capital 80,000 Karim, Lina, and Mazen share profits and losses in a ratio of 4:4:2. Noncash assets were sold for $180,000. Liquidation expenses were $10,000.Assume that Lina was personally insolvent and could not contribute any assets to the partnership, while Karim and Mazen were both solvent. What amount of cash would Karim...

What is the annual opportunity cost of a checking account that requires a minimum balance of...

What is the annual opportunity cost of a checking account that requires a minimum balance of $240 to avoid service charges? Assume an interest rate of 2.5 percent. Round your answer to 2 decimal places.

The primary reason that managers impose a minimum cash balance in the cash budget is a....

The primary reason that managers impose a minimum cash balance in the cash budget is a. that it protects the organization from the uncertainty of the budgeting process. b. that it makes the financial statements look more appealing to creditors. c. because management needs discretionary cash for unforeseen business opportunities. d. managers lack discipline to control their spending.

Consider the following balance sheet (in $millions): Assets consisting of Cash of $2 and Loans of...

Consider the following balance sheet (in $millions): Assets consisting of Cash of $2 and Loans of $10; Liabilities consisting of Deposits of $8, Debt of $2 and Equity of $2 (Total Assets of $12). The average interest earned on the loans is 7% and the average cost of deposits is 6%. Rising interest rates are expected to reduce the deposits by $3 million. Borrowing more debt will cost the bank 6.5% in the short term. A. What will be the...

The following balances are taken from the Trial Balance of Alpha Corp as of December 31,...

The following balances are taken from the Trial Balance of Alpha Corp as of December 31, 2018: Cash $19,000 Accounts Receivable $ 8,000 Accounts Payable 5,500 Equipment 25,000 Interest Income 500 Prepaid Insurance 2,500 Accumulated Depreciation 10,000 Common Stock 20,000 Notes Payable (due in 2019) 7,000 Salaries Expense 28,000 Retained Earnings...

About a company's cash budget, whats the correct answer: A) the minimum cash balance has to...

About a company's cash budget, whats the correct answer: A) the minimum cash balance has to equal the ending cash balance B) Quarters 2 beggining cash balance is the end of the quarters 1 cumulative cash surplus C) ending cash balance + minimum cash balance is = to the cash surplus shown on a cash budget D) firms try to keep a zero cash balance at all times E) a cash deficiency indicates a need for at least a short...

Thomas Corp. has the following simplified balance sheet: Cash &

Thomas Corp. has the following simplified balance sheet: Cash $ 50,000 Current liabilities $125,000 Inventory 150,000 Accounts receivable 100,000 Long-term debt 175,000 Net fixed assets 200,000 Common equity 200,000 Total $500,000 Total $500,000 Cost of sales for the year totaled $600,000 and its gross profit is $200,000. The company president believes the company carries excess inventory. She would like the inventory turnover ratio to be 6 times and would use the cash that we free up from reducing the inventory...

7. Consider a F/I with the following balance sheet: Assets consisting of Cash of $150M; Loans...

7. Consider a F/I with the following balance sheet: Assets consisting of Cash of $150M; Loans of $1,500M at 12% with a duration of 1.75 years; and, Treasuries of $350M at 9% with a 7.00 year duration. Liabilities consisting of time deposits of $700M at 7% with a 1.75 year duration; CDs of $1,150M at 8% with a duration of 2.50 years; and, equity of $150M. Calculate the duration gap and state the F/I's interest rate risk exposure. +1.03 years;...

Question