Sam and Suzy Sizeman need to prepare a cash budget for the last quarter of 2020 to make sure they can cover their expenditures during the period. Sam and Suzy have been preparing budgets for the past several years and have been able to identify the percentage of their income that they pay for most of for their cash outflows. These percentages are based on their take-home pay (e. g., monthly utilities normally run 5.1% of monthly take-home pay). The information in the following table can be used to create their fourth-quarter budget for 2013.

Income

Monthly take-home pay $4,900

Expenses:
Housing 30%
Utilities 5%
Food 10%
Transportation 7%
Medical/dental 0.5%
Clothing for October and November 3%
Clothing for December $440
Property taxes (November only) 11.5%
Appliances 1%
Personal care 2%
Entertainment for October and November 6%
Entertainment for December $1,500
Savings 7.5%
Other 5%
Excess cash 4.5%

Required:
a. Prepare a quarterly cash budget for Sam and Suzy covering the months October through December 2013.
b. Are there individual months that incur a deficit?
c. What is the cumulative cash surplus or deficit by the end of December 2013?

a)                      Statement showing Cash Budget

Particulars       October$     November$   December$    Total

$

Monthly take     4,900.00       4,900.00        4,900.00     14,700.00

home pay

Housing at 30%  1,470.00        1,470.00  1,470.00        4,410.00

Utilities at 5%     245.00         245.00            245.00         735.00

Food at 10%     490.00         490.00            490.00         1,470.00

Transportation   343.00          343.00             343.00         1,029.00

at 7%

Medical at 0.5%   24.50             24.50              24.50            73.50

Clothing at 3%     147.00           147.00                   -               294.00

for Oct and Nov

Clothing for Dec        -                -                 440.00           440.00

Property Taxes          -          563.50                -                563.50

at 11.5% for Nov

Appliances at 1% 49.00           49.00              49.00             147.00

Personal Care      98.00           98.00               98.00            294.00

at 2%

Entertainment     294.00           294.00                      -           588.00

at 6% for Oct and Nov

Entertainment               -                   -                1,500.00       1,500.00

for Dec

Savings at 7.5%   367.50         367.50             367.50           1,102.50

Other 5%               245.00         245.00            245.00          735.00

Excess Cash          220.50        220.50            220.50           661.50

at 4.5%  

Remaining Cash    906.50          343.00          -592.50          657.00

b) Yes-  In December there is a deficit of $592.50

c) Cumulative surplus is of $657 by end of Dec 2013