Question

1. Personal An accounting device used to plan and control resources of operational departments and divisions.Budget

   At the beginning of the school year, Priscilla Wescott decided to prepare a A budget of estimated cash receipts and payments.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)	$7,070
   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 cash decrease which should be indicated with a minus sign.

   Priscilla Wescott
   Cash Budget
   For the Four Months Ending December 31
   	September	October	November	December
   Estimated cash receipts from:
   Additional entertainment Food Part-time job Rent Tuition	$	$	$	$
   Additional entertainment Deposit Food Rent Tuition
   Total cash receipts	$	$	$	$
   Less estimated cash payments for:
   Cash Insurance Movie tickets Part-time job Season football tickets	$
   Additional entertainment Cash Insurance Movie tickets Part-time job		$	$	$
   Cash Insurance Movie tickets Part-time job Tuition
   Cash Insurance Movie tickets Part-time job Rent
   Cash Food Insurance Movie tickets Part-time job
   Deposit Insurance Movie tickets Part-time job Prepaid rent
   Total cash payments	$	$	$	$
   Cash increase (decrease)	$	$	$	$
   Less cash balance at beginning of month Plus cash balance at beginning of month
   Cash balance at end of month	$	$	$	$

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   b. Are the four monthly budgets that are presented prepared as A budget that does not adjust to changes in activity levels.static budgets or A budget that adjusts for varying rates of activity.flexible budgets?
   
   

   • Static
   • Flexible

   c. What are the budget implications for Priscilla Wescott?

   Priscilla can see that her present plan

   • will provide
   • will not provide
   sufficient cash. If Priscilla did not budget but went ahead with the original plan, she would be $
   • over
   • short
   at the end of December, with no time left to adjust.

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Answer 1

KATHERINE MALLOY
Cash Budget
For the Four Months Ending December 31
	September	October	November	December
Estimated cash receipts from:
Part-time job	880	880	880	880
Deposit				500
Total cash receipts	880	880	880	1380
Estimated cash payments for:
Season football tickets	100
Additional entertainment	250	250	250	250
Tuition	3800
Rent	340	340	340	340
Food	190	190	190	190
Deposit	500
Total cash payments	5180	780	780	780
Overall cash increase (decrease)	-4300	100	100	600
Cash balance at beginning of month	7070	2770	2870	2970
Cash balance at end of month	2770	2870	2970	3570
Static Budget
Will not provide sufficient cash
Short of $3800-3570	230