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 MalloyCash BudgetFor the Four Months Ending December 31   September October November December Estimated cash receipts from:         Part-time job         Deposit         Total cash receipts         Estimated cash payments for:         Season football tickets         Additional entertainment         Tuition         Rent         Food         Deposit         Total cash payments         Cash increase (decrease)         Cash balance at beginning 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_____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.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
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:

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 MalloyCash BudgetFor the Four Months Ending December 31
  September October November December
Estimated cash receipts from:        
Part-time job        
Deposit        
Total cash receipts        
Estimated cash payments for:        
Season football tickets        
Additional entertainment        
Tuition        
Rent        
Food        
Deposit        
Total cash payments        
Cash increase (decrease)        
Cash balance at beginning 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_____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.

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 2 images

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education