develop a cash budget

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develop a cash budget

Develop a cash budget based on the following information about a preschool:

Revenue

Tuition fee: $100,000 paid monthly

Event income: $50,000 by Thanksgiving

Foundation support: $200,000 semiannually, May and November

Expense

Salary and wages: $80,000 monthly

Rent and insurance: $100,000 in January

Supply and food: $10,000 monthly

Administration and fundraising: $10,000 monthly

Assume the board of directors does not allow for short-term borrowing and that the cash safety margin is $80,000. How much operating reserve or liquidity should the school have to embark on the preschool program?

Non-For-Profit-Accounting

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