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: Line Item Description Amount Cash balance, September 1 (from a summer job) $7,870 Purchase season football tickets in September 110 Additional entertainment for each month 270 Pay fall semester tuition in September 4,200 Pay rent at the beginning of each month 380 Pay for food each month 220 Pay apartment deposit on September 2 (to be returned December 15) 500 Part-time job earnings each month (net of taxes) 980 Question Content Area 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 31 Line Item Description September October November December Estimated cash receipts from: $Part-time job $Part-time job $Part-time job $Part-time job Deposit Total cash receipts $Total cash receipts $Total cash receipts $Total cash receipts $Total cash receipts 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 $Total cash payments $Total cash payments $Total cash payments $Total cash payments Cash increase (decrease) $Cash increase (decrease) $Cash increase (decrease) $Cash increase (decrease) $Cash increase (decrease) 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 $Cash balance at end of month $Cash balance at end of month $Cash balance at end of month $Cash balance at end of month Question Content Area b. Are the four monthly budgets that are presented prepared as static budgets or flexible budgets? c. What are the budget implications for Craig Kovar? Craig can see that his present plan fill in the blank 1 of 1 sufficient cash. If Craig did not budget but went ahead with the original plan, he would be fill in the blank 2 of 3$ fill in the blank 3 of 3 at the end of December, with no time left to adjust.
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: Line Item Description Amount Cash balance, September 1 (from a summer job) $7,870 Purchase season football tickets in September 110 Additional entertainment for each month 270 Pay fall semester tuition in September 4,200 Pay rent at the beginning of each month 380 Pay for food each month 220 Pay apartment deposit on September 2 (to be returned December 15) 500 Part-time job earnings each month (net of taxes) 980 Question Content Area 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 31 Line Item Description September October November December Estimated cash receipts from: $Part-time job $Part-time job $Part-time job $Part-time job Deposit Total cash receipts $Total cash receipts $Total cash receipts $Total cash receipts $Total cash receipts 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 $Total cash payments $Total cash payments $Total cash payments $Total cash payments Cash increase (decrease) $Cash increase (decrease) $Cash increase (decrease) $Cash increase (decrease) $Cash increase (decrease) 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 $Cash balance at end of month $Cash balance at end of month $Cash balance at end of month $Cash balance at end of month Question Content Area b. Are the four monthly budgets that are presented prepared as static budgets or flexible budgets? c. What are the budget implications for Craig Kovar? Craig can see that his present plan fill in the blank 1 of 1 sufficient cash. If Craig did not budget but went ahead with the original plan, he would be fill in the blank 2 of 3$ fill in the blank 3 of 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...
Related questions
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, Craig Kovar decided to prepare a
| Line Item Description | Amount |
|---|---|
| Cash balance, September 1 (from a summer job) | $7,870 |
| Purchase season football tickets in September | 110 |
| Additional entertainment for each month | 270 |
| Pay fall semester tuition in September | 4,200 |
| Pay rent at the beginning of each month | 380 |
| Pay for food each month | 220 |
| Pay apartment deposit on September 2 (to be returned December 15) | 500 |
| Part-time job earnings each month (net of taxes) | 980 |
Question Content Area
a. Prepare a cash budget for September, October, November, and December. Use the minus sign to indicate
Craig KovarCash BudgetFor the Four Months Ending December 31
| Line Item Description | September | October | November | December |
|---|---|---|---|---|
| Estimated cash receipts from: | ||||
|
|
$Part-time job | $Part-time job | $Part-time job | $Part-time job |
|
|
Deposit | |||
| Total cash receipts | $Total cash receipts | $Total cash receipts | $Total cash receipts | $Total cash receipts |
| 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 | $Total cash payments | $Total cash payments | $Total cash payments | $Total cash payments |
| Cash increase (decrease) | $Cash increase (decrease) | $Cash increase (decrease) | $Cash increase (decrease) | $Cash increase (decrease) |
|
|
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 | $Cash balance at end of month | $Cash balance at end of month | $Cash balance at end of month | $Cash balance at end of month |
Question Content Area
b. Are the four monthly budgets that are presented prepared as static budgets or flexible budgets?
c. What are the budget implications for Craig Kovar?
Craig can see that his present plan fill in the blank 1 of 1
sufficient cash. If Craig did not budget but went ahead with the original plan, he would be fill in the blank 2 of 3$ fill in the blank 3 of 3
at the end of December, with no time left to adjust.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
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.Recommended textbooks for you
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub