eBook Show Me How Personal Budget At the beginning of the school year, Priscilla

Question

eBook Show Me How Personal Budget At the beginning of the school year, Priscilla Wescott decided to prepare a cash budget for the months of September, October, November, and December. The budget must pian enough cash on December 31 to pay the spring semester tuiton, which is the same as the fall tution. The following information relates to the budget: Cash balance, September 1 (from a summer job) Purchase season football tickets in September Additional entertainment for each month Pay fall semester tuition in September Pay rent at the beginning of each month Pay for food each month Pay apartment deposit on September 2 (to be returned December 15) Part-time job earnings each month (net of taxes) a. Prepare a cash budget for September, October, November, and December. Enter all amounts as positive velues with a minus sign. $6,260 3,400 300 170 780 Priscilla Wescott Cash Budget er 31 For the Four Months Ending Total cash receipts Less estimated cash payments for: Net

Explanation / Answer

a. Cash Budget September October November December Estimated cash receipt from: Part-time job earnings 780 780 780 780 Apartment deposit 400 Total cash receipts (a) 780 780 780 1180 Less:Estimated cash payment for: Seasonal football tickets 90 Additional entertainment 220 220 220 220 Fall semester Tution 3400 Rent 300 300 300 300 Food 170 170 170 170 Apartment deposit 400 Total cash payments (b) 4580 690 690 690 Cash increase (decrease) ©=(a)-(b) -3800 90 90 490 Cash balance at the beginning of month (d) 6260 2460 2550 2640 Cash balance at the end of month ©+(d) 2460 2550 2640 3130 Spring semester tution fee=Fall semester tution fee=$3400 Amount short=3400-3130=270 b. Static c. Priscilla can see that her present plan will not provide sufficient cash. If Priscilla did not budget but went ahead with the original plan, she would be $270 short at the end of December, with no time left to adjust

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