At the beginning of the school year, Craig Kovar 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)$6,870Purchase season football tickets in September90Additional entertainment for each month240Pay fall semester tuition in September3,700Pay rent at the beginning of each month330Pay for food each month190Pay apartment deposit on September 2 (to be returned December 15)500Part-time job earnings each month (net of taxes)850 b. Are the four monthly budgets that are presented prepared as static budgets or flexible budgets?Static vc. What are the budget implications for Craig Kovar?Craig can see that his present plan will not provide v sufficient cash. If Craig did not budget but went ahead with the original plan, he would be $short vat the end of December, with no time left toadjust. a. Prepare a cash budget for September, October, November, and December. Use the minus sign to indicate cash outflows, a decrease in cash or cash payments.Craig KovarCash BudgetFor the Four Months Ending December 31SeptemberOctoberNovemberDecemberEstimated cash receipts from:Part-time job v850 V $850 V $850 V850Deposit v500Total cash receipts8508508501,350Less estimated cash payments for:Season football tickets v90 XAdditional entertainment v%24240240240240Tuition v3,700 XRent v330 х330 х330 х330 xFood190 X190190190 XDeposit v500 XTotal cash paymentsCash increase (decrease)Plus cash balance at beginning of month vCash balance at end of monthte%24

Cash budget represents the estimation of cash receipts and cash payments during a time period. The…

Answered: At the beginning of the school year,…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter7: Budgeting

Section: Chapter Questions

Problem 6TP: The management of Hess, Inc., is developing a flexible budget for the upcoming year. It was not...

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Question

At the beginning of the school year, Craig Kovar 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)	$6,870
Purchase season football tickets in September	90
Additional entertainment for each month	240
Pay fall semester tuition in September	3,700
Pay rent at the beginning of each month	330
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)	850

b. Are the four monthly budgets that are presented prepared as static budgets or flexible budgets?
Static v
c. What are the budget implications for Craig Kovar?
Craig can see that his present plan will not provide v sufficient cash. If Craig did not budget but went ahead with the original plan, he would be $
short v
at the end of December, with no time left to
adjust.

a. Prepare a cash budget for September, October, November, and December. Use the minus sign to indicate cash outflows, a decrease in cash or cash payments.
Craig Kovar
Cash Budget
For the Four Months Ending December 31
September
October
November
December
Estimated cash receipts from:
Part-time job v
850 V $
850 V $
850 V
850
Deposit v
500
Total cash receipts
850
850
850
1,350
Less estimated cash payments for:
Season football tickets v
90 X
Additional entertainment v
%24
240
240
240
240
Tuition v
3,700 X
Rent v
330 х
330 х
330 х
330 x
Food
190 X
190
190
190 X
Deposit v
500 X
Total cash payments
Cash increase (decrease)
Plus cash balance at beginning of month v
Cash balance at end of month
te
%24

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.

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