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 Malloy Cash Budget
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Personal Budget
At the beginning of the school year, Katherine Malloy decided to prepare a
| 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 Malloy | ||||
| Cash Budget | ||||
| For the Four Months Ending December 31 | ||||
| September | October | November | December | |
| Estimated cash receipts from: | ||||
| Part-time job | $fill in the blank f74d95fc0fd2034_1 | $fill in the blank f74d95fc0fd2034_2 | $fill in the blank f74d95fc0fd2034_3 | $fill in the blank f74d95fc0fd2034_4 |
| Deposit | fill in the blank f74d95fc0fd2034_5 | |||
| Total cash receipts | $fill in the blank f74d95fc0fd2034_6 | $fill in the blank f74d95fc0fd2034_7 | $fill in the blank f74d95fc0fd2034_8 | $fill in the blank f74d95fc0fd2034_9 |
| Estimated cash payments for: | ||||
| Season football tickets | $fill in the blank f74d95fc0fd2034_10 | |||
| Additional entertainment | fill in the blank f74d95fc0fd2034_11 | $fill in the blank f74d95fc0fd2034_12 | $fill in the blank f74d95fc0fd2034_13 | $fill in the blank f74d95fc0fd2034_14 |
| Tuition | fill in the blank f74d95fc0fd2034_15 | |||
| Rent | fill in the blank f74d95fc0fd2034_16 | fill in the blank f74d95fc0fd2034_17 | fill in the blank f74d95fc0fd2034_18 | fill in the blank f74d95fc0fd2034_19 |
| Food | fill in the blank f74d95fc0fd2034_20 | fill in the blank f74d95fc0fd2034_21 | fill in the blank f74d95fc0fd2034_22 | fill in the blank f74d95fc0fd2034_23 |
| Deposit | fill in the blank f74d95fc0fd2034_24 | |||
| Total cash payments | $fill in the blank f74d95fc0fd2034_25 | $fill in the blank f74d95fc0fd2034_26 | $fill in the blank f74d95fc0fd2034_27 | $fill in the blank f74d95fc0fd2034_28 |
| Cash increase (decrease) | $fill in the blank f74d95fc0fd2034_29 | $fill in the blank f74d95fc0fd2034_30 | $fill in the blank f74d95fc0fd2034_31 | $fill in the blank f74d95fc0fd2034_32 |
| Cash balance at beginning of month | fill in the blank f74d95fc0fd2034_33 | fill in the blank f74d95fc0fd2034_34 | fill in the blank f74d95fc0fd2034_35 | fill in the blank f74d95fc0fd2034_36 |
| Cash balance at end of month | $fill in the blank f74d95fc0fd2034_37 | $fill in the blank f74d95fc0fd2034_38 | $fill in the blank f74d95fc0fd2034_39 | $fill in the blank f74d95fc0fd2034_40 |
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?
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 $fill in the blank 01912b01e07dff1_3 at the end of December, with no time left to adjust
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