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) - $8,690

Purchase season football tickets in September - 120

Additional entertainment for each month - 300

Pay fall semester tuition in September - 4,700

Pay rent at the beginning of each month - 420

Pay for food each month - 240

Pay apartment deposit on September 2 (to be returned December 15) - 600

Part-time job earnings each month (net of taxes) - 1,080 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.

Katherine Malloy Cash Budget For the Month Ending December 31

Estimated cash receipts from:SeptemberOctoberNovemberDecember

Part time job $

Deposit $

Total cash receipts $

Estimated cash payments for:

Seasonal football tickets $

Additional entertainment $

Tuition $

Rent $

Food $

Deposit $

Total Cash Payments $

Overall cash increase (decrease) $

Cash balance at begining of month $

Cash balance at end of month $

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

c. Malloy can see that her present plan (will provide or not provide) sufficient cash. If Malloy did not budget but went ahead with the original plan, she would be $________ ( over or short ) at the end of December, with no time left to adjust.