At the beginning of the school year, Priscilla Wescott 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) $6,000 Purchase season football tickets in September 150 Additional entertainment for each month 250 Pay fall semester tuition in September 3,500 Pay rent at the beginning of each month 450 Pay for food each month 400 Pay apartment deposit on September 2 (to be returned December 15) 450 Part-time job earnings each month (net of taxes) 1,300 Question Content Area 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 WescottCash BudgetFor the Four Months Ending December 31 September October November December Estimated cash receipts from: $Part-time job $Part-time job $Part-time job $Part-time job Deposit Total cash receipts $fill in the blank 575dd0fa2037fa8_8 $fill in the blank 575dd0fa2037fa8_9 $fill in the blank 575dd0fa2037fa8_10 $fill in the blank 575dd0fa2037fa8_11 Less estimated cash payments for: $Season football tickets Additional entertainment $Additional entertainment $Additional entertainment $Additional entertainment Tuition Rent Rent Rent Rent Food Food Food Food Deposit Total cash payments $fill in the blank 575dd0fa2037fa8_33 $fill in the blank 575dd0fa2037fa8_34 $fill in the blank 575dd0fa2037fa8_35 $fill in the blank 575dd0fa2037fa8_36 Cash increase (decrease) $fill in the blank 575dd0fa2037fa8_37 $fill in the blank 575dd0fa2037fa8_38 $fill in the blank 575dd0fa2037fa8_39 $fill in the blank 575dd0fa2037fa8_40 Plus cash balance at beginning of month Plus cash balance at beginning of month Plus cash balance at beginning of month Plus cash balance at beginning of month Cash balance at end of month $fill in the blank 575dd0fa2037fa8_46 $fill in the blank 575dd0fa2037fa8_47 $fill in the blank 575dd0fa2037fa8_48 $fill in the blank 575dd0fa2037fa8_49 Feedback Area Feedback 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? Learning Objective 2 and Learning Objective 5 . Question Content Area b. Are the four monthly budgets that are presented prepared as static budgets or flexible budgets? c. What are the budget implications for Priscilla Wescott? Priscilla can see that her present plan sufficient cash. If Priscilla did not budget but went ahead with the original plan, she would be $fill in the blank a06e2df4a01a031_3 at the end of December, with no time left to adjust.
At the beginning of the school year, Priscilla Wescott 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) $6,000 Purchase season football tickets in September 150 Additional entertainment for each month 250 Pay fall semester tuition in September 3,500 Pay rent at the beginning of each month 450 Pay for food each month 400 Pay apartment deposit on September 2 (to be returned December 15) 450 Part-time job earnings each month (net of taxes) 1,300 Question Content Area 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 WescottCash BudgetFor the Four Months Ending December 31 September October November December Estimated cash receipts from: $Part-time job $Part-time job $Part-time job $Part-time job Deposit Total cash receipts $fill in the blank 575dd0fa2037fa8_8 $fill in the blank 575dd0fa2037fa8_9 $fill in the blank 575dd0fa2037fa8_10 $fill in the blank 575dd0fa2037fa8_11 Less estimated cash payments for: $Season football tickets Additional entertainment $Additional entertainment $Additional entertainment $Additional entertainment Tuition Rent Rent Rent Rent Food Food Food Food Deposit Total cash payments $fill in the blank 575dd0fa2037fa8_33 $fill in the blank 575dd0fa2037fa8_34 $fill in the blank 575dd0fa2037fa8_35 $fill in the blank 575dd0fa2037fa8_36 Cash increase (decrease) $fill in the blank 575dd0fa2037fa8_37 $fill in the blank 575dd0fa2037fa8_38 $fill in the blank 575dd0fa2037fa8_39 $fill in the blank 575dd0fa2037fa8_40 Plus cash balance at beginning of month Plus cash balance at beginning of month Plus cash balance at beginning of month Plus cash balance at beginning of month Cash balance at end of month $fill in the blank 575dd0fa2037fa8_46 $fill in the blank 575dd0fa2037fa8_47 $fill in the blank 575dd0fa2037fa8_48 $fill in the blank 575dd0fa2037fa8_49 Feedback Area Feedback 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? Learning Objective 2 and Learning Objective 5 . Question Content Area b. Are the four monthly budgets that are presented prepared as static budgets or flexible budgets? c. What are the budget implications for Priscilla Wescott? Priscilla can see that her present plan sufficient cash. If Priscilla did not budget but went ahead with the original plan, she would be $fill in the blank a06e2df4a01a031_3 at the end of December, with no time left to adjust.
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...
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Concept explainers
Master Budget
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.
Sales Budget and Selling
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.
Question
At the beginning of the school year, Priscilla Wescott decided to prepare a
| Cash balance, September 1 (from a summer job) | $6,000 |
| Purchase season football tickets in September | 150 |
| Additional entertainment for each month | 250 |
| Pay fall semester tuition in September | 3,500 |
| Pay rent at the beginning of each month | 450 |
| Pay for food each month | 400 |
| Pay apartment deposit on September 2 (to be returned December 15) | 450 |
| Part-time job earnings each month (net of taxes) | 1,300 |
Question Content Area
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.
| September | October | November | December | |
| Estimated cash receipts from: | ||||
|
|
$Part-time job | $Part-time job | $Part-time job | $Part-time job |
|
|
Deposit | |||
| Total cash receipts | $fill in the blank 575dd0fa2037fa8_8 | $fill in the blank 575dd0fa2037fa8_9 | $fill in the blank 575dd0fa2037fa8_10 | $fill in the blank 575dd0fa2037fa8_11 |
| Less estimated cash payments for: | ||||
|
|
$Season football tickets | |||
|
|
Additional entertainment | $Additional entertainment | $Additional entertainment | $Additional entertainment |
|
|
Tuition | |||
|
|
Rent | Rent | Rent | Rent |
|
|
Food | Food | Food | Food |
|
|
Deposit | |||
| Total cash payments | $fill in the blank 575dd0fa2037fa8_33 | $fill in the blank 575dd0fa2037fa8_34 | $fill in the blank 575dd0fa2037fa8_35 | $fill in the blank 575dd0fa2037fa8_36 |
| Cash increase (decrease) | $fill in the blank 575dd0fa2037fa8_37 | $fill in the blank 575dd0fa2037fa8_38 | $fill in the blank 575dd0fa2037fa8_39 | $fill in the blank 575dd0fa2037fa8_40 |
|
|
Plus cash balance at beginning of month | Plus cash balance at beginning of month | Plus cash balance at beginning of month | Plus cash balance at beginning of month |
| Cash balance at end of month | $fill in the blank 575dd0fa2037fa8_46 | $fill in the blank 575dd0fa2037fa8_47 | $fill in the blank 575dd0fa2037fa8_48 | $fill in the blank 575dd0fa2037fa8_49 |
Feedback Area
Feedback
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?
Learning Objective 2
Question Content Area
b. Are the four monthly budgets that are presented prepared as static budgets or flexible budgets?
c. What are the budget implications for Priscilla Wescott?
Priscilla can see that her present plan
sufficient cash. If Priscilla did not budget but went ahead with the original plan, she would be $fill in the blank a06e2df4a01a031_3
at the end of December, with no time left to adjust.
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