The finance director of the Bethandy Independent School District is making preliminary estimates of the budget outlook for the General Fund for the 20x8 fiscal year. These estimates will permit the superintendent to advise the department heads properly when budget instructions and forms are distributed. She has assembled the following information: Estimated 20X7 Expected Change- 20X8 1. Revenues Property Taxes............................................................................ $2,000,000 +6% State aid....................................................................................... 1,000,000 +3% Federal grants.............................................................................. 500,000 -$40,000 Other............................................................................................ 300,000 +$10,000 $3,800,000 2. Expenditures Salaries and wages...................................................................... $2,700,000 ? Utilities........................................................................................ 400,000 +4% Maintenance................................................................................ 300,000 +$24,000 Capital outlay.............................................................................. 200,000 -$15,000 Debt service................................................................................. 100,000 +$20,000 Other............................................................................................ 50,000 +$ 5,000 $3,750,000 3. Fund balance at the end of 20X7 is expected to be $1,600,000; at least $1,500,000 must be available at the end of 20X8 for carryover to help finance 20X9 operations. a. Prepare a draft operating budget for the Bethandy Independent School District for the 20X8 fiscal year, including 20X7 comparative data and expected change computations. Assume that 20X8 appropriations are to equal 20X8 estimated revenues. b. What total salaries and wages amount and average percentage increase or decrease are implied in the draft operating budget prepared in part (a)? What are the maximum salary and wages amount and percentage increase that seem to be feasible in 20X8?
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A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
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A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
The finance director of the Bethandy Independent School District is making preliminary estimates of the budget outlook for the General Fund for the 20x8 fiscal year. These estimates will permit the superintendent to advise the department heads properly when budget instructions and forms are distributed. She has assembled the following information:
|
|
Estimated 20X7 |
Expected Change- 20X8 |
|
1. Revenues |
|
|
|
Property Taxes............................................................................ |
$2,000,000 |
+6% |
|
State aid....................................................................................... |
1,000,000 |
+3% |
|
Federal grants.............................................................................. |
500,000 |
-$40,000 |
|
Other............................................................................................ |
300,000 |
+$10,000 |
|
|
$3,800,000 |
|
|
2. Expenditures |
|
|
|
Salaries and wages...................................................................... |
$2,700,000 |
? |
|
Utilities........................................................................................ |
400,000 |
+4% |
|
Maintenance................................................................................ |
300,000 |
+$24,000 |
|
Capital outlay.............................................................................. |
200,000 |
-$15,000 |
|
Debt service................................................................................. |
100,000 |
+$20,000 |
|
Other............................................................................................ |
50,000 |
+$ 5,000 |
|
|
$3,750,000 |
|
3. Fund balance at the end of 20X7 is expected to be $1,600,000; at least $1,500,000 must be available at the end of 20X8 for carryover to help finance 20X9 operations.
a. Prepare a draft operating budget for the Bethandy Independent School District for the 20X8 fiscal year, including 20X7 comparative data and expected change computations. Assume that 20X8 appropriations are to equal 20X8 estimated revenues.
b. What total salaries and wages amount and average percentage increase or decrease are implied in the draft operating budget prepared in part (a)? What are the maximum salary and wages amount and percentage increase that seem to be feasible in 20X8?
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