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)	$5,750
Purchase season football tickets in September	210
Additional entertainment for each month	275
Pay fall semester tuition in September	3,700
Pay rent at the beginning of each month	600
Pay for food each month	235
Pay apartment deposit on September 2 (to be returned December 15)	500
Part-time job earnings each month (net of taxes)	1,400

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.

KATHERINE MALLOY Cash Budget For the Four Months Ending December 31

	September	October	November	December
Estimated cash receipts from:
Part-time job	$fill in the blank e8a14b058fda042_1	$fill in the blank e8a14b058fda042_2	$fill in the blank e8a14b058fda042_3	$fill in the blank e8a14b058fda042_4
Deposit				fill in the blank e8a14b058fda042_5
Total cash receipts	$fill in the blank e8a14b058fda042_6	$fill in the blank e8a14b058fda042_7	$fill in the blank e8a14b058fda042_8	$fill in the blank e8a14b058fda042_9
Estimated cash payments for:
Season football tickets	$fill in the blank e8a14b058fda042_10
Additional entertainment	fill in the blank e8a14b058fda042_11	$fill in the blank e8a14b058fda042_12	$fill in the blank e8a14b058fda042_13	$fill in the blank e8a14b058fda042_14
Tuition	fill in the blank e8a14b058fda042_15
Rent	fill in the blank e8a14b058fda042_16	fill in the blank e8a14b058fda042_17	fill in the blank e8a14b058fda042_18	fill in the blank e8a14b058fda042_19
Food	fill in the blank e8a14b058fda042_20	fill in the blank e8a14b058fda042_21	fill in the blank e8a14b058fda042_22	fill in the blank e8a14b058fda042_23
Deposit	fill in the blank e8a14b058fda042_24
Total cash payments	$fill in the blank e8a14b058fda042_25	$fill in the blank e8a14b058fda042_26	$fill in the blank e8a14b058fda042_27	$fill in the blank e8a14b058fda042_28
Overall cash increase (decrease)	$fill in the blank e8a14b058fda042_29	$fill in the blank e8a14b058fda042_30	$fill in the blank e8a14b058fda042_31	$fill in the blank e8a14b058fda042_32
Cash balance at beginning of month	fill in the blank e8a14b058fda042_33	fill in the blank e8a14b058fda042_34	fill in the blank e8a14b058fda042_35	fill in the blank e8a14b058fda042_36
Cash balance at end of month	$fill in the blank e8a14b058fda042_37	$fill in the blank e8a14b058fda042_38	$fill in the blank e8a14b058fda042_39	$fill in the blank e8a14b058fda042_40

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?

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

StaticFlexible

c. Malloy can see that her present plan

will providewill not provide

sufficient cash. If Malloy did not budget but went ahead with the original plan, she would be $fill in the blank b69392008f9f073_3

overshort

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