I need help answering parts A and B below.

Current Year Budget

Revenue:Timing:

Special Events $40,000. 1^st qtr. 20%, 2^nd quarter 50% and 4^th quarter 30%

Contributions $30,000. 1^st qtr. 20%, 2^nd qtr. 20%, 3^rd qtr. 20%, 4^th qtr. 40%

Grants $40,000. 2^nd quarter 40%, 4^th quarter 60%

Endowment Income $4,000. Earnings on Endowment Fund: 25% each quarter

Interest Income$2,000Interest on operating fund: (1% of previous qtr. ending bal.)

Total Revenue$116,000.

Expenses:

Travel$3,000.1^st quarter 10%, 2^nd quarter 30%, 3^rd quarter 50%, 4^th quarter 10%

Special Events$40,000.1^st quarter 10%, 2^nd quarter 60%, 4^th quarter 30%

Conferences$2,000.3^rd quarter

Fundraising$4,000.1^st quarter 20%, 2^nd quarter 30%, 4^th quarter 50%

Insurance$3,000.1^st quarter

Newsletter$2,000.25% each quarter

Postage$2,000.25% each quarter

Professional Fees$5,000.25% each quarter

Publicity$1,000.25% each quarter

Salary$45,000.25% each quarter

Supplies$2,000.25% each quarter

Payroll Taxes$4,500.10% of "Salary" each quarter

Telephone$1,500.25% each quarter

Total Expense$115,000.

Part A: Assist with a line-item Operating Budget for the following (next) year using the Current Year numbers and assumptions about changes in individual line items. You'll find that this, and subsequent questions, can be answered more easily if you complete your work in a spreadsheet.

(6 points)

1) Calculate the CWC's surplus or deficit for the current year both as a dollar amount and

as a percent of annual (Total) expense (Surplus or Deficit / Total Expense). (1 point)

2) Without much information about the organization, which ONE expense seems

unusually high / low during the current year? (1 point)

3) Use the assumptions concerning changes in the various revenue and expense line items to

calculate the CWC's surplus or deficit for the next year both as a dollar amount and as a

percent of annual expense. (1 point)

4) Does the budget for the next year meet their goal of a 6% (percent of annual expense)

budget surplus? If not, calculate the surplus they need to exactly hit the 6% (of total expense)

budget surplus target assuming total expense is constant. (1 point)

Part B: Complete a quarterly cash budget for the next year. Assume all revenue and expenses occur on the last day of each quarter. Also assume a $50,000 beginning cash balance. Add 1% each quarter based on the beginning of quarter cash balance (.01 x beginning of quarter cash balance) as interest income. Re-calculate the "Interest Income" line item for each quarter. (8 points)

1) How large (calculated both as a dollar amount and as a percent of annual expense) is the

lowest quarterly ending cash balance? (1 point)

2) Why did the Interest Income line item increase (decrease) from the budgeted amount? (1

point)