In: Accounting
Personal Budget
At the beginning of the school year, Craig Kovar 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) | $7,510 |
Purchase season football tickets in September | 100 |
Additional entertainment for each month | 260 |
Pay fall semester tuition in September | 4,100 |
Pay rent at the beginning of each month | 360 |
Pay for food each month | 200 |
Pay apartment deposit on September 2 (to be returned December 15) | 500 |
Part-time job earnings each month (net of taxes) | 930 |
a. Prepare a cash budget for September, October, November, and December. Use the minus sign to indicate cash outflows, a decrease in cash or cash payments.
Craig Kovar | ||||
Cash Budget | ||||
For the Four Months Ending December 31 | ||||
September | October | November | December | |
Estimated cash receipts from: | ||||
Part-time job | $fill in the blank e5886a012073fa2_2 | $fill in the blank e5886a012073fa2_3 | $fill in the blank e5886a012073fa2_4 | $fill in the blank e5886a012073fa2_5 |
Deposit | fill in the blank e5886a012073fa2_7 | |||
Total cash receipts | $fill in the blank e5886a012073fa2_8 | $fill in the blank e5886a012073fa2_9 | $fill in the blank e5886a012073fa2_10 | $fill in the blank e5886a012073fa2_11 |
Less estimated cash payments for: | ||||
Season football tickets | $fill in the blank e5886a012073fa2_13 | |||
Additional entertainment | fill in the blank e5886a012073fa2_15 | $fill in the blank e5886a012073fa2_16 | $fill in the blank e5886a012073fa2_17 | $fill in the blank e5886a012073fa2_18 |
Tuition | fill in the blank e5886a012073fa2_20 | |||
Rent | fill in the blank e5886a012073fa2_22 | fill in the blank e5886a012073fa2_23 | fill in the blank e5886a012073fa2_24 | fill in the blank e5886a012073fa2_25 |
Food | fill in the blank e5886a012073fa2_27 | fill in the blank e5886a012073fa2_28 | fill in the blank e5886a012073fa2_29 | fill in the blank e5886a012073fa2_30 |
Deposit | fill in the blank e5886a012073fa2_32 | |||
Total cash payments | $fill in the blank e5886a012073fa2_33 | $fill in the blank e5886a012073fa2_34 | $fill in the blank e5886a012073fa2_35 | $fill in the blank e5886a012073fa2_36 |
Cash increase (decrease) | $fill in the blank e5886a012073fa2_37 | $fill in the blank e5886a012073fa2_38 | $fill in the blank e5886a012073fa2_39 | $fill in the blank e5886a012073fa2_40 |
Less cash balance at beginning of month | fill in the blank e5886a012073fa2_42 | fill in the blank e5886a012073fa2_43 | fill in the blank e5886a012073fa2_44 | fill in the blank e5886a012073fa2_45 |
Cash balance at end of month | $fill in the blank e5886a012073fa2_46 | $fill in the blank e5886a012073fa2_47 | $fill in the blank e5886a012073fa2_48 | $fill in the blank e5886a012073fa2_49 |
Feedback
Sometimes an item may be a decrease in one period and an increase in a different period.
Review the definitions of static budgets and flexible budgets.
What weaknesses are shown by this cash budget?
b. Are the four monthly budgets that are
presented prepared as static budgets or flexible budgets?
Static
c. What are the budget implications for Craig Kovar?
Craig can see that his present plan will not provide sufficient cash. If Craig did not budget but went ahead with the original plan, he would be $fill in the blank 9b0586052fd4fe0_3 short at the end of December, with no time left to adjust.
sorry about the weird code the website the assignment is on is glitched
a. | Cash budget | ||||||||
September | October | November | December | ||||||
Estimated cash receipts from: | |||||||||
Part-time job | 930 | 930 | 930 | 1300 | |||||
Deposit | 450 | ||||||||
Total cash receipts | a | 930 | 930 | 930 | 1750 | ||||
Less estimated cash payments for: | |||||||||
Season football tickets | 100 | ||||||||
Additional entertainment | 260 | 260 | 260 | 260 | |||||
Tuition | 4100 | ||||||||
Rent | 360 | 360 | 360 | 360 | |||||
Food | 200 | 200 | 200 | 200 | |||||
Deposit | 500 | ||||||||
Total cash payments | b | 5520 | 820 | 820 | 820 | ||||
Overall cash increase (decrease) | a-b | -4590 | 110 | 110 | 930 | ||||
Add:Cash balance at beginning of month | 7510 | 2920 | 3030 | 3140 | |||||
Cash balance at end of month | 2920 | 3030 | 3140 | 4070 | |||||
b. | Static budget | ||||||||
Flexible budget is based on actual level of activity | |||||||||
c. | Spring semester tution=fall semester tution=$ 4100 | ||||||||
Cash balance at end of December=$ 4100 | |||||||||
Shortage=4100-4070=$ 30 | |||||||||
Craig can see that her present plan will not provide sufficient cash to pay fall semester tution fee. | |||||||||
If Craig did not budget but went ahead with the original plan, she would be $ 30 short at the end of December, with no time left to adjust. | |||||||||