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:

Line Item Description Amount

Cash balance, September $1($from a summer job$)$ $$6,930$

Purchase season football tickets in September $90$

Additional entertainment for each month $240$

Pay fall semester tuition in September $3,700$

Pay rent at the beginning of each month $340$

Pay for food each month $190$

Pay apartment deposit on September $2($to be returned December $15)500$

Part$-$time job earnings each month $($net of taxes$)860$

Question Content Area

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 $31$

Line Item Description September October November December

Estimated cash receipts from:

$$-$ Select $-$

$$-$ Select $-$

$$-$ Select $-$

$$-$ Select $-$

$-$ Select $-$

Total cash receipts $Total cash receipts

$Total cash receipts

$Total cash receipts

$Total cash receipts

Less estimated cash payments for:

$$-$ Select $-$

$-$ Select $-$

$$-$ Select $-$

$$-$ Select $-$

$$-$ Select $-$

$-$ Select $-$

$-$ Select $-$

$-$ Select $-$

$-$ Select $-$

$-$ Select $-$

$-$ Select $-$

$-$ Select $-$

$-$ Select $-$

$-$ Select $-$

$-$ Select $-$

Total cash payments $Total cash payments

$Total cash payments

$Total cash payments

$Total cash payments

Cash increase $($decrease$)$ $Cash increase $($decrease$)$

$Cash increase $($decrease$)$

$Cash increase $($decrease$)$

$Cash increase $($decrease$)$

$-$ Select $-$

$-$ Select $-$

$-$ Select $-$

$-$ Select $-$

Cash balance at end of month $Cash balance at end of month

$Cash balance at end of month

$Cash balance at end of month

$Cash balance at end of month

Question Content Area

b$.$ Are the four monthly budgets that are presented prepared as static budgets or flexible budgets?

c$.$ What are the budget implications for Craig Kovar?

Craig can see that his present plan fill in the blank $1$ of $1$

sufficient cash. If Craig did not budget but went ahead with the original plan, he would be fill in the blank $2$ of $3$$

fill in the blank $3$ of $3$

at the end of December, with no time left to adjust.