1. At the beginning of the school year, Katherine Malloy 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)$7,060 At the beginning of the school year, Katherine Malloy decided to prepare a cash budget for the months of September, October, November, and December. The budgetmust 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 SeptemberAdditional entertainment for each monthPay fall semester tuition in SeptemberPay rent at the beginning of each monthPay for food each monthPay apartment deposit on September 2 (to be returned December 15)Part-time job earnings each month (net of taxes)KATHERINE MALLOYCash BudgetFor the Four Months Ending December 31SeptemberEstimated cash receipts from:Part-time jobDepositTotal cash receiptsEstimated cash payments for:Season football ticketsAdditional entertainment$7,060Tuition1002503,800a. Prepare a cash budget for September, October, November, and December. Enter all amounts as positive values except an overall cash decrease which should beindicated with a minus sign.340190500880October NovemberDecember FoodDeposit$Total cash payments.Overall cash increase (decrease)Cash balance at beginning of monthO Cash balance at end of monthFeedbackRentStaticCheck My WorkSometimes 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?b. Are the four monthly budgets that are presented prepared as static budgets or flexible budgets?Feedback00 0000c. Malloy can see that her present plan will not provideshort몸Check My Work✓sufficient cash. If Malloy did not budget but went ahead with the original plan, she would be✔at the end of December, with no time left to adjust.LIPP

Cash Budget is an estimation of the cash inflows and cash outflows for the future period for that…

Answered: At the beginning of the school year,…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter8: Budgeting

Section: Chapter Questions

Problem 1E: At the beginning of the school year, Craig Kovar decided to prepare a cash budget for the months of...

See similar textbooks

Related questions

Concept explainers

Question

1. At the beginning of the school year, Katherine Malloy 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) $7,060

At the beginning of the school year, Katherine Malloy 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)
KATHERINE MALLOY
Cash Budget
For the Four Months Ending December 31
September
Estimated cash receipts from:
Part-time job
Deposit
Total cash receipts
Estimated cash payments for:
Season football tickets
Additional entertainment
$7,060
Tuition
100
250
3,800
a. Prepare a cash budget for September, October, November, and December. Enter all amounts as positive values except an overall cash decrease which should be
indicated with a minus sign.
340
190
500
880
October November
December

Food
Deposit
$Total cash payments.
Overall cash increase (decrease)
Cash balance at beginning of month
O Cash balance at end of month
Feedback
Rent
Static
Check My Work
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?
b. Are the four monthly budgets that are presented prepared as static budgets or flexible budgets?
Feedback
00 0000
c. Malloy can see that her present plan will not provide
short
몸
Check My Work
✓sufficient cash. If Malloy did not budget but went ahead with the original plan, she would be
✔at the end of December, with no time left to adjust.
LIPP

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.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.