Tri-County Social Service Agency is a not-for-profit organization in the Midwest. Use the following information to complete the cash budget for the year ending December 31. The Board of Trustees requires that Tri-County maintain a minimum cash balance of $8,000. If cash is short, the agency may borrow from an endowment fund the amount required to maintain the $8,000 minimum. It is anticipated that the year will begin with an $11,000 cash balance. Contract revenue is received evenly during the year. Mental health income is expected to grow by $5,000 in the second and third quarters; no change is expected in the fourth quarter. Required: 2. Complete the cash budget for each quarter and the year as a whole. 3. Determine the amount that the agency will owe the endowment fund at year-end.
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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.
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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.
Tri-County Social Service Agency is a not-for-profit organization in the Midwest. Use the following information to complete the
- The Board of Trustees requires that Tri-County maintain a minimum cash balance of $8,000.
- If cash is short, the agency may borrow from an endowment fund the amount required to maintain the $8,000 minimum.
- It is anticipated that the year will begin with an $11,000 cash balance.
- Contract revenue is received evenly during the year.
- Mental health income is expected to grow by $5,000 in the second and third quarters; no change is expected in the fourth quarter.
Required:
2. Complete the cash budget for each quarter and the year as a whole.
3. Determine the amount that the agency will owe the endowment fund at year-end.
![Cash balance, beginning
Receipts:
Grants
Contracts
Mental health income
Charitable donations
Total cash available
Less Disbursements:
Salaries and benefits
Office expenses
Equipment purchases & maintenance
Specific assistance
Total disbursements
Excess (deficit) of cash available over disbursements
Financing:
Borrowings from endowment fund
Repayments
TRI-COUNTY SOCIAL SERVICE AGENCY
Quarterly and Annual Cash Budget (in thousands)
Quarters
Total financing effects
Cash balance, ending
I
11 $
80
20
250
70
2
20
(46)
||
8
70
473
342
4
15
(39)
$
CA
8
200
333
71
6
18
112
$
GA
IV
8 $
400
50
112
Year
11
300
80
105
1,365
256
17
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