At the beginning of the school year, Priscilla Wescott 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) $8,510 Purchase season football tickets in September 120 Additional entertainment for each month 300 Pay fall semester tuition in September 4,600 Pay rent at the beginning of each month 410 Pay for food each month 230 Pay apartment deposit on September 2 (to be returned December 15) 600 Part-time job earnings each month (net of taxes) 1,060 a. Prepare a cash budget for September, October, November, and December. Enter all amounts as positive values except cash decrease which should be indicated with a minus sign. Priscilla Wescott Cash Budget For the Four Months Ending December 31 September October November December Estimated cash receipts from: $ $ $ $ Total cash receipts $ $ $ $ Less estimated cash payments for: $ $ $ $ Total cash payments $ $ $ $ Cash increase (decrease) $ $ $ $ Cash balance at end of month $ $ $ $ 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? Learning Objective 2 and Learning Objective 5. b. Are the four monthly budgets that are presented prepared as static budgets or flexible budgets? Static c. What are the budget implications for Priscilla Wescott? Priscilla can see that her present plan will not provide sufficient cash. If Priscilla did not budget but went ahead with the original plan, she would be $ short at the end of December, with no time left to adjust.