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