Cash Budget Report
The given information with respect to annual estimated receipts and expenditure are as follows
(Fig. in dollars)
| ANNUAL ANTICIPATED RECEIPTS | ANNUAL ANTICIPATED EXPENDITURE | ||
| Salary from a part-time job | 10000 | Tuition | 4500 |
| Salary from a Summer job | 4000 | Books | 400 |
| Rent | 3500 | ||
| Food | 2500 | ||
| Utilities | 800 | ||
| Entertainment | 4000 | ||
| Deficiency | (-) 1,700 | ||
| Total receipts | 15700 | Total expenditure | 15700 |
Ted Frey anticipated cash receipts for the entire year are $ 14,000 which inclusive of salary of part-time and summer jobs. Out of the receipts the share of part-time job is more ie. $10,000 whereas salary from summer job is only $4,000. Hence still there is the possibility to get more income from summer jobs if sufficient trials made. As far as expected cash payments i.e. expenditure for the year comes with $15,700, which is more than earnings with a deficit of $1,700. The expenditure related to Tuition $4500, Books $400, Rent $3500, Food $2,500, Utilities $800 and Entertainment $4,000. It indicates that Ted Frey interested to expend more on entertainment, which should be, curtailed the extent of deficit.
The provided budget information is only the total expected receipts and total expenditure for the year. The budget information has no details of balance of cash in hand or bank, which is main item to prepare the cash budget. Besides, the budget information did not provide time spent on the earnings. Some of the expenditure indicates higher more than the comfortable level. Hence Food and utility expenditure may be curtailed partially. Similarly, Rent expenditure also should be decreased as it is too higher. The Tuition fee and Books expenditure are sufficient and hence it should be intact. But in the case of Entertainment expenditure, it is too high and hence it should be decreased. The budget indicates the deficiency of $1,700, which should be recouped either by increasing receipts or by decreasing expenditure. The budget also suggests that entertainment expenditure is too high and it indicates that the individual is spending more time on entertainment, which involves more time and more expenditure of money. If less time is provided to entertainment it is possibility of earning more income from the saved time out of entertainment.
Hence the individual supposed to concentrate on part-time jobs to increase the earning capacity with the surplus time which would be derived from the time of entertainment. With that, the deficiency can be recouped and the additional amount will also be available as follows:
PROJECT CASH BUDGET
(Fig. in dollars)
| ANNUAL ANTICIPATED RECEIPTS | ANNUAL ANTICIPATED EXPENDITURE | ||
| Salary from part time job | 12000 | Tuition | 4500 |
| Salary from Summer job | 4000 | Books | 400 |
| Rent | 3500 | ||
| Food | 2500 | ||
| Utilities | 400 | ||
| Entertainment | 1000 | ||
| (+) 3,700 | |||
| 16000 | Total expenditure | 16000 |
With the above estimation, it can be found that still surplus available with $3,700 ( 16,000-12,300). Hence the individual should follow the above plan.
