Chapter 21 Homework Personal Budget 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) Purchase season football tickets in September Additional entertainment for each month Pay fall semester tuition in September Pay rent at the beginning of each month Pay for food each month Pay apartment deposit on September 2 (to be returned December 15) Part-time job earnings each month (net of taxes) $10,300 140 220 5,400 530 480 530 1,050 This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Open spreadsheet 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. Craig Kovar Cash Budget For the Four Months Ending December 31 September October November December Estimated cash receipts from: Part-time job 1,050 $ 1,050 $ 1,050 $ 1,050 Deposit Total cash receipts 1,050 $ 1,050 $ 1,050 $ 530 ✓ 1,580 ✓ Less estimated cash payments for: Season football tickets 140 Additional entertainment 220 $ 220 $ 220 $ 220 Estimated cash receipts from: Part-time job Deposit Total cash receipts Less estimated cash payments for: Season football tickets Additional entertainment Tuition Rent Food Deposit Total cash payments Cash increase (decrease) For the Four Months Ending December 31 September 1,050 $ 1,050 140 ✔ $ October November December 1,050 1,050 1,050 530 1,050 $ 1,050 $ 1,580 ✓ 220 ✓ 220 220 $ 220 5,400 530 ✓ 530 530 530 480 ✔ 480 480 480 530 ✔ -8,350 X $ -2,280 X $ Plus 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? Static c. What are the budget implications for Craig Kovar? $ Craig can see that his present plan will not provide sufficient cash. If Craig did not budget but went ahead with the original plan, he would be $ short at the end of December, with no time left to adjust.