At the beginning of the school year, Katherine Malloy decided to prepare a cash
ID: 2511127 • Letter: A
Question
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:
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.
b. Are the four monthly budgets that are presented prepared as static budgets or flexible budgets?
c. Malloy can see that her present plan sufficient cash. If Malloy did not budget but went ahead with the original plan, she would be $ at the end of December, with no time left to adjust.
Cash balance, September 1 (from a summer job) $8,520 Purchase season football tickets in September 120 Additional entertainment for each month 300 Pay fall semester tuition in September 4,600 Pay rent at the beginning of each month 410 Pay for food each month 230 Pay apartment deposit on September 2 (to be returned December 15) 600 Part-time job earnings each month (net of taxes) 1,060Explanation / Answer
KATHERINE MALLOY
Cash Budget
For the Four Months Ending December 31
September
October
November
December
Estimated cash receipts from:
Part-time job
1060
1060
1060
1060
Deposit
600
Total cash receipts
1060
1060
1060
1060
Estimated cash payments for:
Season football tickets
120
0
0
0
Additional entertainment
300
300
300
300
Tuition
4600
0
0
0
Rent
410
410
410
410
Food
230
230
230
230
Deposit
600
Total cash payments
6260
940
940
940
Overall cash increase (decrease)
-5200
120
120
120
Cash balance at beginning of month
8520
3320
3440
3560
Cash balance at end of month
3320
3440
3560
3680
2-
static Budget
3-
Shortage of 920 to pay the spring semester fees
4600-3680
920
KATHERINE MALLOY
Cash Budget
For the Four Months Ending December 31
September
October
November
December
Estimated cash receipts from:
Part-time job
1060
1060
1060
1060
Deposit
600
Total cash receipts
1060
1060
1060
1060
Estimated cash payments for:
Season football tickets
120
0
0
0
Additional entertainment
300
300
300
300
Tuition
4600
0
0
0
Rent
410
410
410
410
Food
230
230
230
230
Deposit
600
Total cash payments
6260
940
940
940
Overall cash increase (decrease)
-5200
120
120
120
Cash balance at beginning of month
8520
3320
3440
3560
Cash balance at end of month
3320
3440
3560
3680
2-
static Budget
3-
Shortage of 920 to pay the spring semester fees
4600-3680
920
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