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Karim Corp. requires a minimum $9,800 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 $10,200, 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 $25,800 $33,800 $41,800
Cash payments 30,700 31,800 33,800
Question 1: Prepare cash budget for July, August, and September.
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