At the beginning of the 2010 school year, Britney Logan 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) . . . . . . . . . . . . . . . . . . . . . . . $7,000
Purchase season football tickets in September . . . . . . . . . . . . . . . . . . . . . . . . . 100
Additional entertainment for each month . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250
Pay fall semester tuition on September 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,800
Pay rent at the beginning of each month . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 350
Pay for food each month . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200
Pay apartment deposit on September 2 (to be returned Dec. 15) . . . . . . . . . . . . 500
Part-time job earnings each month (net of taxes) . . . . . . . . . . . . . . . . . . . . . . . . 900
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 Britney Logan?