Question

Personal Budget

At the beginning of the school year, Katherine Malloy 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)	$7,070
Purchase season football tickets in September	100
Additional entertainment for each month	250
Pay fall semester tuition in September	3,800
Pay rent at the beginning of each month	340
Pay for food each month	190
Pay apartment deposit on September 2 (to be returned December 15)	500
Part-time job earnings each month (net of taxes)	880

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.

KATHERINE MALLOY
Cash Budget
For the Four Months Ending December 31
	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	$	$	$	$
Overall 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. Malloy can see that her present plan (will/ will not provide) sufficient cash. If Malloy did not budget but went ahead with the original plan, she would be $ ___ (short/over) at the end of December, with no time left to adjust.

PLEASE HELP IVE ASKED SEVERAL TIMES WITH NO RESPONSES

Answer 1

a

KATHERINE MALLOY Cash Budget For The Four Months Ending December 31
	September	October	November	December
Estimated cash receipts from:
Part-time job	$880	$880	$880	$880
Deposit				500
Total cash receipts	880	880	880	1,380
Estimated cash payments for:
Season football tickets	100
Additional entertainment	250	250	250	250
Tution	3,800
Rent	340	340	340	340
Food	190	190	190	190
Deposit	500
Total cash payments	5,180	780	780	780
Overall cash increase (decrease)	(4,300)	100	100	600
Cash balance at beginning of month	7,070	2,770	2,870	2,970
Cash balance at end of month	$2,770	$2,870	$2,970	$3,570

b. Static budget

c. Malloy can see that her present plan will not provide sufficient cash. If Malloy did not budget but went ahead with the original plan, she would be $230 (3,800-3,570) short at the end of December, with no time left to adjust.