At the beginning of the school year, Craig Kovar 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) $9,250 Purchase season football tickets in September 160 Additional entertainment for each month 250 Pay fall semester tuition in September 4,800 Pay rent at the beginning of each month 600 Pay for food each month 550 Pay apartment deposit on September 2 (to be returned December 15) 600 Part-time job earnings each month (net of taxes) 1,200 Prepare a cash budget for September, October, November, and December. Answer Check Figure: December 31 cash balance, $3,490 Are the four monthly budgets that are presented prepared as static budgets or flexible budgets?  What are the budget implications for Craig Kovar?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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At the beginning of the school year, Craig Kovar 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) $9,250
Purchase season football tickets in September 160
Additional entertainment for each month 250
Pay fall semester tuition in September 4,800
Pay rent at the beginning of each month 600
Pay for food each month 550
Pay apartment deposit on September 2 (to be returned December 15) 600
Part-time job earnings each month (net of taxes) 1,200
  1. Prepare a cash budget for September, October, November, and December.

    Answer

    Check Figure: December 31 cash balance, $3,490

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

  3.  What are the budget implications for Craig Kovar?

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