Loose Leaf for Personal Finance
12th Edition
ISBN: 9781259720680
Author: Jack R. Kapoor, Les R. Dlabay Professor, Robert J. Hughes, Melissa Hart
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 3, Problem 1CC
Money management strategy: financial statements and budgeting
Jamie Lee Jackson, age 25, now a busy full-time college student and part-time bakery clerk, has been trying to organize all of her priorities, including her budget. She has been wondering if she is allocating enough of her income toward savings, which includes accumulating enough money toward the $9,000 down payment she needs to achieve her dream and open a cupcake café.
Jamie Lee has been making regular deposits to her regular and emergency savings accounts. She would really like to sit down amid get a clearer picture of how much she is spending on various expenses, including rent, utilities, amid entertainment, and how her debt compares to her savings and assets. She realizes that she must stay on track and keep a detailed budget if she is to realize her dream of being self-employed after college graduation.
1. According to the text, a Personal
| Current Financial Situation | ||
| Assets: | Monthly Expenses: | |
| Checking account: $1,250 | Rent obligation: $275 | |
| Emergency fund saving account: | Utilities obligation: | |
| $3,100 | $125 | |
| Car: $4,000 | Food: $120 | |
| Liabilities: | Gas/maintenance: $100 | |
| Student loan: $5,400 | Credit card payment: | |
| Credit card balance: $400 | $50 | |
| Income: | Saving: | |
| Gross monthly salary: $2,125 | Regular savings: $150 | |
| Net monthly salary: $1,560 | Rainy day savings: $25 | |
| Entertainment: | ||
| Cake decorating class: | ||
| $35 | ||
| Movies with friends: | ||
| $50 |
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Students have asked these similar questions
Budgeting is important not only for businesses. Also in our personal lives we have scarce resources, especially money and time, but also other resources like for example cell phone data, use of the family computer or family TV set, access to childcare etc.
Our college prepares annual budgets as well.
please look at line items 18 and 21. What do these dollar amounts tell you? What are your conclusions for the college?
Share your observations with the class and discuss possible reasons for your observations.
The importance of cash budgets for all types of businesses and individuals cannot be overemphasized.
The following six steps to cash flow control are critical.
Create a monthly cash flow budget. Determine the amount you need to achieve your business and personal financial goals, including enough to pay taxes and fund your retirement.
At the end of each month compare cash inflows and outflows to make necessary adjustments to cash spending or saving.
Accounting software can help automate the process.
Set aside cash each month to pay your taxes on time.
Make quarterly contributions to a retirement account.
Establish a line of credit with a bank, or investigate other short-term financing sources, well before you think you’ll need the extra cash.
Instructions
Assume for item number 2 that a business’s actual cash flows are not enough to achieve its business goals and some necessary adjustments must be made. Name at least four adjustment procedures that businesses can use to equalize cash…
Jason Zhang has recently been hired as a financial analyst for Abbots Masonry Ltd. The CEO has come to Jason with some questions about cash budgeting and whether the company should start budgeting for cash on a monthly or annual basis.
Required:
Prepare the answers to the CEO’s questions as follows:
a) What are the objectives of cash budgeting?
b) Discuss the advantages and disadvantages of preparing a cash budget on a monthly basis versus on an annual basis.
Chapter 3 Solutions
Loose Leaf for Personal Finance
Ch. 3 - Prob. 3.1PQ1Ch. 3 - Prob. 3.1PQ2Ch. 3 - Prob. 3.1PQ3Ch. 3 - Prob. 3.1PQ4Ch. 3 - Prob. 3.2PQ1Ch. 3 - Prob. 3.2PQ2Ch. 3 - Prob. 3.2PQ3Ch. 3 - Prob. 3.2PQ4Ch. 3 - Prob. 3.3PQ1Ch. 3 - Prob. 3.3PQ2
Ch. 3 - Prob. 3.3PQ3Ch. 3 - Prob. 3.3PQ4Ch. 3 - What actions might you take when evaluating your...Ch. 3 - Prob. 3.4PQ1Ch. 3 - Prob. 3.4PQ2Ch. 3 - Determining Liquid Assets and Current Liabilities....Ch. 3 - Calculating Balance Sheet Amounts. Based on the...Ch. 3 - 3. Preparing a Personal Balance sheet.Use the...Ch. 3 - 4. Computing Balance Sheet Amounts. For each of...Ch. 3 - Prob. 5FPPCh. 3 - 6. Determining Financial Progress. Carl Lester has...Ch. 3 - 7. Determining Budget Variances. Fran Bowen...Ch. 3 - 8. Calculating the Effect of inflation. Bill and...Ch. 3 - Prob. 9FPPCh. 3 - Prob. 10FPPCh. 3 - Prob. 11FPPCh. 3 - 12. Future Value of Savings. Kara George received...Ch. 3 - Researching Money Management Information. Talk to...Ch. 3 - Prob. 2FPACh. 3 - Prob. 3FPACh. 3 - Prob. 4FPACh. 3 - Prob. 5FPACh. 3 - Prob. 6FPACh. 3 - Prob. 1FPCCh. 3 - Prob. 2FPCCh. 3 - Prob. 3FPCCh. 3 - Money management strategy: financial statements...Ch. 3 - Prob. 2CCCh. 3 - Prob. 3CCCh. 3 - Prob. 4CCCh. 3 - Prob. 1DSDCh. 3 - Prob. 2DSD
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