Question - Personal Budget
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) $6,510
Purchase season football tickets in September 90
Additional entertainment for each month 230
Pay fall semester tuition in September 3,500
Pay rent at the beginning of each month 320
Pay for food each month 180
Pay apartment deposit on September 2 [to be returned December 15) 500
Part-time job earnings each month (net of taxes) 810
Required -
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.
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?