PFIN (with PFIN Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
6th Edition
ISBN: 9781337117005
Author: Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher: Cengage Learning
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Question
Chapter 2, Problem 4FPE
a)
Summary Introduction
To reconcile: The differences in given situation.
b)
Summary Introduction
To reconcile: The differences in given situation.
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Sarah Geronimo and Matteo Guidicelli are preparing their 2021 cash budget. Help the Guidicelli couple reconcile the following differences, giving reasons to support your answers.
Their only source of income is Matteo’s salary, which amounts to $5,000 a month before taxes. Sarah wants to show the $5,000 as their monthly income, whereas Matteo argues that his take-home pay of $3,917 is the correct value to show.
Sarah wants to make a provision for fun money, an idea that Matteo cannot understand. He asks, “Why do we need fun money when everything is provided for in the budget?”
Carl is a student at a college. He has a part-time job with take-home pay of $525 every two weeks. He has received a scholarship of $4100 this year. a) Use the data provided to design a monthly budget for Carl. Show your calculations for his income and expenses. Identify each expense as fixed or variable.
b) Is Carl earning enough to cover his expenses? If not, suggest how he could balance the budget
Trevor and Kristen Hill need to prepare a cash budget for the
next three months to make sure that they can cover their
expenditures during the period. Trevor and Kristen have
tracked their finances for the past few years using an app, and
thus know what percentage of their take-home pay of $5500
goes for various expenses.
Expenses
Housing
Utilities
Food
Transportation
Medical/dental
Contributions
Clothing (3% normally; $450 in Month 3)
Property Taxes ($1260, Month 2 only)
Appliances
Personal Care
Travel and Entertainment (6%; $1400 in Month 3)
Other
Savings
29.0%
5.0%
9.5%
6.0%
5.0%
10.5%
3.0%
a.
1.0%
2.0%
6.0%
5.0%
7.5%
The Hills must maintain a $1500 cash balance to avoid
checking fees; however, the balance on March 31, 2021 was
$1300. Their savings account balance on March 31 was
$20,000.
Prepare a quarterly cash budget for Trevor and Kristen
for the next three months.
b. Using your calculations, show the monthly inflows and
outflows and the end-of-month balances for the Hills…
Chapter 2 Solutions
PFIN (with PFIN Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
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