-On January 1, 2018, you incorporated Jobs University (hereafter "Jobs U."), a not-for-profit organization with the mission of alleviating income insecurity through job training for low-skilled workers. The organization's third fiscal year will be January 1-December 31, 2020,

• Jobs U. will start the fiscal year with a cash balance of $127,000.
• Jobs U. operates throughout the year, and in FY'2020 it expects 100 new trainees each month (unchanged from FY 2019).
• Per its contract with Wagner City, the city will increase its reimbursement to Jobs U. from $900 per trainee in FY 2019 to $1,100 per trainee in FY 2020.
• Wagner City makes the contractual payments with a one-month lag.
• In FY 2020, Jobs U. expects to receive $400,000 in contributions from corporate sponsors, spread evenly throughout the year.
• Jobs U. will have 15 full-time employees in FY 2020 (unchanged from FY 2019). Full-time employees will:
  • Earn an average annual salary of $65,000, up from an average annual salary of $60,000 in FY 2019;
• Be paid monthly with a one-month lag; and
• Be paid benefits valued at 35% of their salaries.
• Jobs U. will have 5 part-time employees in FY 2020 (unchanged from FY 2019). Part-time employees will:
  • Earn an average of $14 per hour in wages in FY 2020, up from an average of $13.50 per hour in FY 2019.
  • Work 20 hours per week, 52 weeks per year
  • Be paid weekly with a one-week lag.
• Jobs U. owns its facility and industrial equipment, which:
  • Was purchased in 2018 for $2,500,000.
  • Has an estimated useful life of 25 years, and
  • No salvage value.
• Jobs U. owns 120 computers, each of which:
  • It purchased for $500 in 2018,
  • Has an estimated useful life of 5 years, and
  • A salvage value of $50.
• Jobs U. has:
  • Been renting its office furniture at a cost of $10,000 per month, but
  • Expects to purchase and start using new furniture (and to stop renting furniture) July 1, 2020.
    • The furniture will cost $100,000, and
    • Will have an estimated useful life of 10 years, and
    • A salvage value of $5,000.
• To purchase the facility and equipment, on January 1, 2018, Jobs U.:
  • Took out a 10-year, $2,500,000 mortgage
  • with a 3% annual interest rate
  • Makes a principal repayment and an interest payment on the last day of each fiscal year.
  • Will owe just $2,057,305 in outstanding principal (round the interest expense up to the nearest whole dollar) on December 31, 2020, and
  • Will repay $231,358 in principal when due on December 31, 2020.
• Finally, in FY'2020 Jobs U. will use:
  • $1,250 in utilities per month, and
  • $850 in supplies per month.
  • There are no lags or leads in payments on these expenses

Using the Excel template below:

1. How would an annual operating budget for FY 2020 on the accrual basis of accounting look like?
2. How would a quarterly cash budget for FY 2020 look like?
3. Which factor(s) are driving the difference between the organization's expected profit/loss on the operating budget and ending cash balance on the cash budget?
4. Do you recommend revising the budget plan in light of the organization's expected profit/loss and/or ending cash balance? Why or why not?

1 1JobsUniversityTEMPLATE Q~ Search Sheet Home Insert Page Layout Formulas Data Review View + Share Cut Arial 10 A- A Number 2 AutoSum = =1 Wrap Text AP. Copy Fill Paste Merge & Center Format $ % 2 00 .0 Conditional Format Cell Insert Delete Format Sort & Formatting as Table Styles Clear Filter * Office Update To keep up-to-date with security updates, fixes, and improvements, choose Check for Updates. Check for Updates M1 X V fx C E F G H K L M N O P Q R S Jobs University Jobs University Annual Operating Budget Quarterly Cash Budget FY 2020 FY 2020 AayaMAN Revenues and Support Quarter 1 Quarter 2 Quarter 3 Quarter 4 Annual City contra Contributions Beginning Balance Total revenues Cash Receipt 11 Expenses City contract 12 FT Salaries and benefits Contributions 13 PT Wages Total cash receipts 14 Depreciation 15 Furniture rental Available Cash 16 Interest 17 Utilities Cash Payments 18 Supplies FT Salaries and benefits 19 Total expenses PT Wages 20 Furniture rental 21 Profit/ (Loss Interest Utilities Supplies Total cash payments 26 Subtotal 27 Borrowing Repayments Investments Ending Cash Balance Part C: Part D: 45 46 47 48 49 50 51 53 Jobs University TEMPLATE + Normal Ready - + 100%