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)	$8,670
Purchase season football tickets in September	120
Additional entertainment for each month	300
Pay fall semester tuition in September	4,700
Pay rent at the beginning of each month	420
Pay for food each month	240
Pay apartment deposit on September 2 (to be returned December 15)	600
Part-time job earnings each month (net of taxes)	1,080

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   sufficient cash. If Malloy 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

a.

Cash Budget

For the Four Months ending December 31

	September	October	November	December
Estimated cash receipts from :
Part time job	1080	1080	1080	1080
Deposit				600
Total cash receipts	1080	1080	1080	1680
Estimated cash payments for
Season football tickets	120
Additional entertainment	300	300	300	300
Tuition	4700
Rent	420	420	420	420
food	240	240	240	240
Deposit	600
Total cash payments	6380	960	960	960
Overall cash increase (decrease)	-5300	120	120	720
Cash Balance at beginning of month	8670	3370	3490	3610
Cash balance at end of month	3370	3490	3610	4330

b. Static budget

Static budget do not change with change in levels. The current case has no levels to adjust to rather only the month with expenditures in each of those month.

c. Malloy does not have sufficient cash as he is short of 4700-4330 = 370

kindly upvote