1. 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)$7,060 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): $7,060- Purchase season football tickets in September: $100- Additional entertainment for each month: $250- Pay fall semester tuition in September: $3,800- Pay rent at the beginning of each month: $340- Pay for food each month: $190- Pay apartment deposit on September 2 (to be returned December 15): $500- Part-time job earnings each month (net of taxes): $880**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 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 | $ | $ | $ | $ |(Note: The table is a template to be filled out using the provided figures.) **Cash Budget Exercise****Rent**- **Food**- **Deposit****Total Cash Payments**- **Overall Cash Increase (Decrease)**- **Cash Balance at Beginning of Month**- **Cash Balance at End of Month****Feedback**- **Check My Work** Sometimes an item may be a decrease in one period and an increase in a different period. Review the definitions of static budgets and flexible budgets. What weaknesses are shown by this cash budget?**b.** Are the four monthly budgets that are presented prepared as **static budgets** or **flexible budgets**? **Static** ✔️ **c.** Malloy can see that her present plan **will not provide** ✔️ sufficient cash. If Malloy did not budget but went ahead with the original plan, she would be $ ____ **short** ✔️ at the end of December, with no time left to adjust.**Feedback**- **Check My Work**

Cash Budget is an estimation of the cash inflows and cash outflows for the future period for that…

Answered: At the beginning of the school year,…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Concept explainers

Question

1. 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) $7,060

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): $7,060
- Purchase season football tickets in September: $100
- Additional entertainment for each month: $250
- Pay fall semester tuition in September: $3,800
- Pay rent at the beginning of each month: $340
- Pay for food each month: $190
- Pay apartment deposit on September 2 (to be returned December 15): $500
- Part-time job earnings each month (net of taxes): $880

**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 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 | $ | $ | $ | $ |

(Note: The table is a template to be filled out using the provided figures.)

**Cash Budget Exercise**

**Rent**
- **Food**
- **Deposit**

**Total Cash Payments**
- **Overall Cash Increase (Decrease)**
- **Cash Balance at Beginning of Month**
- **Cash Balance at End of Month**

**Feedback**
- **Check My Work**
Sometimes an item may be a decrease in one period and an increase in a different period.

Review the definitions of static budgets and flexible budgets.

What weaknesses are shown by this cash budget?

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

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

**Feedback**
- **Check My Work**

Definition Definition Estimate of an organization's cash flow for a future period. A cash budget forecasts future cash receipts and payments from various sources for a fiscal year. A cash budget can be created once a month or once a week to determine the organization's cash position and ensure its performance in relation to the budget. It aids in determining whether the company has enough cash and cash equivalents to meet its operational needs in the future.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions