Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
7th Edition
ISBN: 9780357033609
Author: Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 2, Problem 5FPE
a)
Summary Introduction
To reconcile: The differences in given situation
b)
Summary Introduction
To reconcile: The differences in given situation
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
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?”
This is Ben’s budget. Use his budget to determine the answer to the following questions:
1. Scenario: Suppose Ben wants to buy a house for $251,599. Calculate his 20% down payment for this home.
2. Scenario: Suppose Ben wants to buy a house for $251,599. For a 15-year mortgage, Ben gets a 4% interest rate. Calculate his monthly payments for this 15-year mortgage.
3. Scenario: Suppose Ben wants to buy a house for $251,599. For a 30-year mortgage, Ben gets a 5% interest rate. Calculate his monthly payments for this 30-year mortgage
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
Chapter 2 Solutions
Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Similar questions
- In an attempt to better understand RR’s cash position, Johnson developed a cash budget for the first 2 months of the year. She has the figures for the other months, but they are not shown. After looking at the cash budget, answer the following questions: What does the cash budget show regarding the target cash level? Should depreciation expense be explicitly included in the cash budget? Why or why not? What are some other potential cash inflows besides collections? How can interest earned or paid on short-term securities or loans be incorporated in the cash budget? In her preliminary cash budget, Johnson has assumed that all sales are collected and thus that RR has no bad debts. Is this realistic? If not, how would bad debts be dealt with in a cash budgeting sense? (Hint: Bad debts will affect collections but not purchases.)arrow_forwardDecide whether it should be included in the cash budget for the business, for each transaction ; prepare a cash budget for the three months ending 31 March, 2022. 1. Anton invested £10,000 cash in the business on 1 January, 2022.2. Anton plans to make drawings of £800 per month for each personal expenditure.3. Anton purchases a computer for his personal use at a cost of £499 in January.4. Anton also purchased a computer in January for business purposes at a cost of £720 cash.5. He plans to buy a motor vehicle for £3,200 cash on 1 March, for business purposes.6. Sales estimates are as following:January = £4,200February = £ 3,200March = £2,9507. Sales are made 30% cash and 70% on one months’ credit.8. Purchases will be made for cash as follows:January = £ 2,800February = £1,500March = £17509. Other expenses are estimated as follows:• Electricity £285 payable at the end of the quarter.• Telephone costs of £120 per month, payable at the end of each month by cash.• Fuel cost for motor…arrow_forwardLeyia and Larry Hartley of Columbus, Ohio have decided to start a family next year, so they are looking over their budget. Leyia thinks that she can go on half-salary ($2,400 instead of $4,800 per month) in her job as a college textbook sales representative for about 18 months after the baby's birth; she will then return to full-time work. Looking at the Hartley's current monthly budget, identify categories and amounts in their budget where they realistically might cut back $2,400. (Hint: Federal and state taxes should drop about $600 a month ($7,200 annually) as their income drops.)arrow_forward
- Based on the information below, create a monthly budget. Once the budget is established, estimate how much you would be able to save monthly. Identify three money wasters that you might keep you from sticking to your budget. What would the impact of those money wasters be on your ability to save? Budget Scenario You have recently graduated with a degree in marketing and started a job that pays $50,000 per year. Your monthly net income is $3,000. You have decided to move into a one-bedroom apartment in Saint Paul. Since you work within walking distance, you won’t need to own a car. You don’t want to be lonely in your new place, so you decided to adopt a pet. You let your friends talk you into joining the YMCA since it is now close to your new place. You have one credit card for emergencies, but you did use it to buy some new furniture for your apartment. You need to create a budget that you can stick to, because you are saving your money to take a trip to Europe in three years.…arrow_forwardThis is Ben’s budget. Use his budget to determine the answer to the following question: Scenario: Suppose Ben wants to buy a house for $251,599. Calculate his 20% down payment for this home.arrow_forwardAshley and Duncan just created their January 2019 income and expense statement. They spent their combined $3,500 gross monthly income on the following expenses: $350 for tithing, $1,000 on rent, $400 to their Roth retirement plan, $1,000 on taxes, $300 on food and eating out, $100 on entertainment, and the rest in their savings account. They decide that for their February budget they want to invest an extra $100 in their Roth retirement (for a total of $500), cut each remaining variable category in half, and put the rest into savings. If all goes according to plan, how much money will Ashley and Duncan put towards savings in February? Group of answer choices 1) $100 2) $450 3) $500 4) $600arrow_forward
- At the beginning of the school year, Craig Kovar decided to prepare a cash budget for the monthsof 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 followinginformation relates to the budget: Cash balance, September 1 (from a summer job) . . . . . . . . . . . . . . . . . $9,250Purchase season football tickets in September . . . . . . . . . . . . . . . . . . . . . . 160Additional entertainment for each month . . . . . . . . . . . . . . . . . .. . . . . . . . . 250Pay fall semester tuition in September . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,800Pay rent at the beginning of each month . . . . . . . . . . . . . . . . . . . . . . . . . . . 600Pay for food each month . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 550Pay apartment deposit on September 2 (to be returned December 15) . 600Part-time job earnings each…arrow_forwardFor each transaction, decide whether it should be included in the cash budget for the business;prepare a cash budget for the three months ending 31 March, 2022. 1. Anton invested £10,000 cash in the business on 1 January, 2022.2. Anton plans to make drawings of £800 per month for each personal expenditure.3. Anton purchases a computer for his personal use at a cost of £499 in January.4. Anton also purchased a computer in January for business purposes at a cost of £720 cash.5. He plans to buy a motor vehicle for £3,200 cash on 1 March, for business purposes.6. Sales estimates are as following:January = £4,200February = £ 3,200March = £2,9507. Sales are made 30% cash and 70% on one months’ credit.8. Purchases will be made for cash as follows:January = £ 2,800February = £1,500March = £17509. Other expenses are estimated as follows:• Electricity £285 payable at the end of the quarter.• Telephone costs of £120 per month, payable at the end of each month by cash.• Fuel cost for motor…arrow_forwardFor each transaction, decide whether it should be included in the cash budget for the business;prepare a cash budget for the three months ending 31 March, 2022.1. Anton invested £10,000 cash in the business on 1 January, 2022.2. Anton plans to make drawings of £800 per month for each personal expenditure.3. Anton purchases a computer for his personal use at a cost of £499 in January.4. Anton also purchased a computer in January for business purposes at a cost of £720 cash.5. He plans to buy a motor vehicle for £3,200 cash on 1 March, for business purposes.6. Sales estimates are as following:January = £4,200February = £ 3,200March = £2,9507. Sales are made 30% cash and 70% on one months’ credit.8. Purchases will be made for cash as follows:January = £ 2,800February = £1,500March = £17509. Other expenses are estimated as follows:• Electricity £285 payable at the end of the quarter.• Telephone costs of £120 per month, payable at the end of each month by cash.• Fuel cost for motor vehicle…arrow_forward
- At the beginning of the school year, Priscilla Wescott 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) $6,000 Purchase season football tickets in September 150 Additional entertainment for each month 250 Pay fall semester tuition in September 3,500 Pay rent at the beginning of each month 450 Pay for food each month 400 Pay apartment deposit on September 2 (to be returned December 15) 450 Part-time job earnings each month (net of taxes) 1,300 Question Content Area a. Prepare a cash budget for September, October, November, and December. Enter all amounts as positive values except cash decrease which should be indicated with a minus sign. Priscilla WescottCash BudgetFor the Four Months Ending…arrow_forwardEmmanuel Macron has the following budgeted business transactions for the month of May 2020: insurance refund received: $500; payments to be made to materials suppliers: $15,000; payments to be made to employees: $4,000; cash expected from customers: $25,000; budgeted depreciation charge on non-current assets: $800; budgeted interest paid to bank: $40; personal drawings: $2,000. At 1 May 2020, Emmanuel is budgeting an overdraft at the bank of $4,000. What is Emmanuel's budgeted cash position at the end of May 2020? $340 overdrawn $340 cash in the bank $460 cash in the bank $460 overdrawnarrow_forwardA. Help Susan develop a model for the year that will meet her irregular monthly financial obligations while achieving her investment objectives and solve the model. B. If Susan decides she doesn’t want to include all her original $3,800 in her budget at the beginning of the year, but instead she wants to invest some of it directly in alternative longer-term investments, how much does she need to develop a feasible budget?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Pfin (with Mindtap, 1 Term Printed Access Card) (...FinanceISBN:9780357033609Author:Randall Billingsley, Lawrence J. Gitman, Michael D. JoehnkPublisher:Cengage Learning
PFIN (with PFIN Online, 1 term (6 months) Printed...FinanceISBN:9781337117005Author:Randall Billingsley, Lawrence J. Gitman, Michael D. JoehnkPublisher:Cengage Learning
Pfin (with Mindtap, 1 Term Printed Access Card) (...
Finance
ISBN:9780357033609
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Cengage Learning
PFIN (with PFIN Online, 1 term (6 months) Printed...
Finance
ISBN:9781337117005
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Cengage Learning