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 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) $6,000 Purchase season football tickets in September 150 Additional entertainment for each month 250 Pay fall semester tuition in September 3,500 Pay rent at the beginning of each month 450 Pay for food each month 400 Pay apartment deposit on September 2 (to be returned December 15) 450 Part-time job earnings each month (net of taxes) 1,300 Question Content Area a. Prepare a cash budget for September, October, November, and December. Enter all amounts as positive values except cash decrease which should be indicated with a minus sign. Priscilla WescottCash BudgetFor the Four Months Ending December 31 September October November December Estimated cash receipts from: $Part-time job $Part-time job $Part-time job $Part-time job Deposit Total cash receipts $fill in the blank 575dd0fa2037fa8_8 $fill in the blank 575dd0fa2037fa8_9 $fill in the blank 575dd0fa2037fa8_10 $fill in the blank 575dd0fa2037fa8_11 Less estimated cash payments for: $Season football tickets Additional entertainment $Additional entertainment $Additional entertainment $Additional entertainment Tuition Rent Rent Rent Rent Food Food Food Food Deposit Total cash payments $fill in the blank 575dd0fa2037fa8_33 $fill in the blank 575dd0fa2037fa8_34 $fill in the blank 575dd0fa2037fa8_35 $fill in the blank 575dd0fa2037fa8_36 Cash increase (decrease) $fill in the blank 575dd0fa2037fa8_37 $fill in the blank 575dd0fa2037fa8_38 $fill in the blank 575dd0fa2037fa8_39 $fill in the blank 575dd0fa2037fa8_40 Plus cash balance at beginning of month Plus cash balance at beginning of month Plus cash balance at beginning of month Plus cash balance at beginning of month Cash balance at end of month $fill in the blank 575dd0fa2037fa8_46 $fill in the blank 575dd0fa2037fa8_47 $fill in the blank 575dd0fa2037fa8_48 $fill in the blank 575dd0fa2037fa8_49 Feedback Area Feedback 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? Learning Objective 2 and Learning Objective 5 . Question Content Area b. Are the four monthly budgets that are presented prepared as static budgets or flexible budgets? c. What are the budget implications for Priscilla Wescott? Priscilla can see that her present plan sufficient cash. If Priscilla did not budget but went ahead with the original plan, she would be $fill in the blank a06e2df4a01a031_3 at the end of December, with no time left to adjust.

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 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) $6,000 Purchase season football tickets in September 150 Additional entertainment for each month 250 Pay fall semester tuition in September 3,500 Pay rent at the beginning of each month 450 Pay for food each month 400 Pay apartment deposit on September 2 (to be returned December 15) 450 Part-time job earnings each month (net of taxes) 1,300 Question Content Area a. Prepare a cash budget for September, October, November, and December. Enter all amounts as positive values except cash decrease which should be indicated with a minus sign. Priscilla WescottCash BudgetFor the Four Months Ending December 31 September October November December Estimated cash receipts from: $Part-time job $Part-time job $Part-time job $Part-time job Deposit Total cash receipts $fill in the blank 575dd0fa2037fa8_8 $fill in the blank 575dd0fa2037fa8_9 $fill in the blank 575dd0fa2037fa8_10 $fill in the blank 575dd0fa2037fa8_11 Less estimated cash payments for: $Season football tickets Additional entertainment $Additional entertainment $Additional entertainment $Additional entertainment Tuition Rent Rent Rent Rent Food Food Food Food Deposit Total cash payments $fill in the blank 575dd0fa2037fa8_33 $fill in the blank 575dd0fa2037fa8_34 $fill in the blank 575dd0fa2037fa8_35 $fill in the blank 575dd0fa2037fa8_36 Cash increase (decrease) $fill in the blank 575dd0fa2037fa8_37 $fill in the blank 575dd0fa2037fa8_38 $fill in the blank 575dd0fa2037fa8_39 $fill in the blank 575dd0fa2037fa8_40 Plus cash balance at beginning of month Plus cash balance at beginning of month Plus cash balance at beginning of month Plus cash balance at beginning of month Cash balance at end of month $fill in the blank 575dd0fa2037fa8_46 $fill in the blank 575dd0fa2037fa8_47 $fill in the blank 575dd0fa2037fa8_48 $fill in the blank 575dd0fa2037fa8_49 Feedback Area Feedback 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? Learning Objective 2 and Learning Objective 5 . Question Content Area b. Are the four monthly budgets that are presented prepared as static budgets or flexible budgets? c. What are the budget implications for Priscilla Wescott? Priscilla can see that her present plan sufficient cash. If Priscilla did not budget but went ahead with the original plan, she would be $fill in the blank a06e2df4a01a031_3 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

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Question Content Area

a. Prepare a cash budget for September, October, November, and December. Enter all amounts as positive values except cash decrease which should be indicated with a minus sign.

Priscilla WescottCash BudgetFor the Four Months Ending December 31

	September	October	November	December
Estimated cash receipts from:
	$Part-time job	$Part-time job	$Part-time job	$Part-time job
				Deposit
Total cash receipts	$fill in the blank 575dd0fa2037fa8_8	$fill in the blank 575dd0fa2037fa8_9	$fill in the blank 575dd0fa2037fa8_10	$fill in the blank 575dd0fa2037fa8_11
Less estimated cash payments for:
	$Season football tickets
	Additional entertainment	$Additional entertainment	$Additional entertainment	$Additional entertainment
	Tuition
	Rent	Rent	Rent	Rent
	Food	Food	Food	Food
	Deposit
Total cash payments	$fill in the blank 575dd0fa2037fa8_33	$fill in the blank 575dd0fa2037fa8_34	$fill in the blank 575dd0fa2037fa8_35	$fill in the blank 575dd0fa2037fa8_36
Cash increase (decrease)	$fill in the blank 575dd0fa2037fa8_37	$fill in the blank 575dd0fa2037fa8_38	$fill in the blank 575dd0fa2037fa8_39	$fill in the blank 575dd0fa2037fa8_40
	Plus cash balance at beginning of month	Plus cash balance at beginning of month	Plus cash balance at beginning of month	Plus cash balance at beginning of month
Cash balance at end of month	$fill in the blank 575dd0fa2037fa8_46	$fill in the blank 575dd0fa2037fa8_47	$fill in the blank 575dd0fa2037fa8_48	$fill in the blank 575dd0fa2037fa8_49

Feedback Area

Feedback

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?

Learning Objective 2

and Learning Objective 5

Question Content Area

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

c. What are the budget implications for Priscilla Wescott?

Priscilla can see that her present plan

sufficient cash. If Priscilla did not budget but went ahead with the original plan, she would be $fill in the blank a06e2df4a01a031_3

at the end of December, with no time left to adjust.

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.

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Cash balance, September 1 (from a summer job)	$6,000
Purchase season football tickets in September	150
Additional entertainment for each month	250
Pay fall semester tuition in September	3,500
Pay rent at the beginning of each month	450
Pay for food each month	400
Pay apartment deposit on September 2 (to be returned December 15)	450
Part-time job earnings each month (net of taxes)	1,300