At the beginning of the 2016 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:n
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Cash balance, September 1 (from a summer job) . . . . . . . . . . . . . . . . . $5,750n
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Purchase season football tickets in September . . . . . . . . . . . . . . . . . . . 210n
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Additional entertainment for each month . . . . . . . . . . . . . . . . . . . .. . . . 275n
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Pay fall semester tuition in September . . . . . . . . . . . . . . . . . . . . . .. . . . . . 3,700n
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Pay rent at the beginning of each month . . . . . . . . . . . . . . . . . . . . .. . . . 600n
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Pay for food each month . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235n
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Pay apartment deposit on September 2 (to be returned December 15) . . . 500n
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Part-time job earnings each month (net of taxes) . . . . . . . . . . . . . . . . . . 1,400n
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a. Prepare a cash budget for September, October, November, and December.n
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b. Are the four monthly budgets that are presented prepared as static budgets or flexible budgets?n
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c. What are the budget implications for Katherine Malloy?