Personal Budget

At the beginning of the school year, Katherine Malloy 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)$8,260Purchase season football tickets in September110Additional entertainment for each month290Pay fall semester tuition in September4,500Pay rent at the beginning of each month400Pay for food each month220Pay apartment deposit on September 2 (to be returned December 15)600Part-time job earnings each month (net of taxes)1,020

Question Content Area

a. Prepare a cash budget for September, October, November, and December. Enter all amounts as positive values except an overall cash decrease which should be indicated with a minus sign.

SeptemberOctoberNovemberDecemberEstimated cash receipts from: Part-time job$fill in the blank d5efc300eff506b_1$fill in the blank d5efc300eff506b_2$fill in the blank d5efc300eff506b_3$fill in the blank d5efc300eff506b_4Deposit fill in the blank d5efc300eff506b_5Total cash receipts$fill in the blank d5efc300eff506b_6$fill in the blank d5efc300eff506b_7$fill in the blank d5efc300eff506b_8$fill in the blank d5efc300eff506b_9Estimated cash payments for: Season football tickets$fill in the blank d5efc300eff506b_10 Additional entertainmentfill in the blank d5efc300eff506b_11$fill in the blank d5efc300eff506b_12$fill in the blank d5efc300eff506b_13$fill in the blank d5efc300eff506b_14Tuitionfill in the blank d5efc300eff506b_15 Rentfill in the blank d5efc300eff506b_16fill in the blank d5efc300eff506b_17fill in the blank d5efc300eff506b_18fill in the blank d5efc300eff506b_19Foodfill in the blank d5efc300eff506b_20fill in the blank d5efc300eff506b_21fill in the blank d5efc300eff506b_22fill in the blank d5efc300eff506b_23Depositfill in the blank d5efc300eff506b_24 Total cash payments$fill in the blank d5efc300eff506b_25$fill in the blank d5efc300eff506b_26$fill in the blank d5efc300eff506b_27$fill in the blank d5efc300eff506b_28Overall cash increase (decrease)$fill in the blank d5efc300eff506b_29$fill in the blank d5efc300eff506b_30$fill in the blank d5efc300eff506b_31$fill in the blank d5efc300eff506b_32Cash balance at beginning of monthfill in the blank d5efc300eff506b_33fill in the blank d5efc300eff506b_34fill in the blank d5efc300eff506b_35fill in the blank d5efc300eff506b_36Cash balance at end of month$fill in the blank d5efc300eff506b_37$fill in the blank d5efc300eff506b_38$fill in the blank d5efc300eff506b_39$fill in the blank d5efc300eff506b_40

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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?

Question Content Area

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

StaticFlexibleStatic

c. Malloy can see that her present plan

will providewill not providewill not provide

sufficient cash. If Malloy did not budget but went ahead with the original plan, she would be $fill in the blank b8789aff4f9dfc0_3

overshortshort

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