F Health Club (Family, Fitness, and Fun) is a not-for-profit family-oriented health club. The club's board of directors is developing plans to acquire more equipment and to expand club facilities. The board plans to purchase about $25,000 of new equipment each year and wants to establish a fund to purchase the adjoining property in four or five years. The adjoining property has a market value of about $300,000.

The Triple-F Health Clubs board of directors currently prepares the annual budget themselves without input from Jane and the six department managers and then allocates the budgeted dollars to each department. As part of your report, Jane would like you to discuss the advantages and disadvantages having Jane and department managers participate in the annual budget process. Jane and the department managers would prepare their own department budgets as a basis for developing Tripel-Fs annual budget in comparison to the current process where they have no input to the annual budget.

The club manager, Jane Crowe, is concerned that the board has unrealistic goals in light of the club's recent financial performance. She has sought the help of a club member with an accounting background to assist her in preparing a report to the board supporting her concerns. The member reviewed the club's records, including the cash-basis income statement in Appendix A.

Jane would like you to prepare a cash budget for 2024 for the Triple-F Health Club and explain any operating problems that this budget discloses for the Triple-F Health Club. Is Jane Crowe's concern that the board's goals are unrealistic justified?

additional information:

\begin{tabular}{lrr} & \begin{tabular}{c} Triple-F Health Club \\ Income Statement (Cash Basis) \\ For the years ended October 31 \end{tabular} & \\ & 2023 & 2022 \\ Cash revenues: & $355,000 & $300,000 \\ Annual membership fees & 234,000 & 180,000 \\ Lesson and class fees & 2,000 & 1,500 \\ Miscellaneous & $591,000 & $481,500 \\ Total cash revenues & & \\ Cash expenses: & 36,000 & 36,000 \\ Manager's salary and benefits & 190,000 & 190,000 \\ Regular employees' wages and benefits & 195,000 & 150,000 \\ Lesson and class employees' wages and benefits & 16,000 & 15,500 \\ Towels and supplies & 22,000 & 15,000 \\ Utilities (heat and light) & 35,100 & 37,800 \\ Mortgage interest & 2,000 & 1,500 \\ Miscellaneous & $496,100 & $445,800 \\ Total cash expenditures & $94,900 & $35,700 \\ Increase in cash & & \end{tabular} Other financial information as of October 31,2023 : r) rienced in 2023 12023 It with 30% increase in uge rate increase above