Question

Personal Budget

At the beginning of the 2016 school year, Britney Logan decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget:

Cash balance, September 1 (from a summer job)	$6,500
Purchase season football tickets in September	90
Additional entertainment for each month	230
Pay fall semester tuition in September	3,500
Pay rent at the beginning of each month	320
Pay for food each month	180
Pay apartment deposit on September 2 (to be returned December 15)	500
Part-time job earnings each month (net of taxes)	810

a. Prepare a cash budget for September, October, November, and December. Enter all amounts as positive values except an overall cash decrease which should be indicated with a minus sign.

Britney Logan
Cash Budget
For the Four Months Ending December 31, 2016
	September	October	November	December
Estimated cash receipts from:
Part-time job	$	$	$	$
Deposit
Total cash receipts	$	$	$	$
Estimated cash payments for:
Season football tickets	$
Additional entertainment		$	$	$
Tuition
Rent
Food
Deposit
Total cash payments	$	$	$	$
Cash increase (decrease)	$	$	$	$
Cash balance at beginning of month
Cash balance at end of month	$	$	$	$

b. Are the four monthly budgets that are presented prepared as static budgets or flexible budgets?

c. Brittany can see that her present plan sufficient cash. If Logan did not budget but went ahead with the original plan, she would be $ at the end of December, with no time left to adjust.

Answer 1

Britney Logan
Cash Budget
For the Four Months Ending December 31, 2016
	September	October	November	December
Estimated cash receipts from:
Part-time job	810	810	810	810
Deposit				500
Total cash receipts	810	810	810	1310
Estimated cash payments for:
Season football tickets	90
Additional entertainment	230	230	230	230
Tuition	3500			3500
Rent	320	320	320	320
Food	180	180	180	180
Deposit	500
Total cash payments	4820	730	730	4230
Cash increase (decrease)	-4010	80	80	-2920
Cash balance at beginning of month	6500	2490	2570	2650
Cash balance at end of month	2490	2570	2650	-270
B- it is a static Budget
C-She would have shortage of 270 if she would not plan