BUSI 223 Exercise 2 solutions complete answers

BUSI 223 Exercise 2 solutions complete answers 

 

Please use this information to fill out the balance sheet and cash flow statement

Use your own information to do the budget. If you do not have any information, you can use this.

 

I graduated from college 3 years ago and just bought my first house. I make $42,000 a year for a salary. I get paid $1436.25 (which taxes and my 401K are taken out) on the 1st and 15th. My company pays also pays my health insurance premium. My company does a 100% match on my 401K up to 6% of my salary, so I have been doing that for the last 3 years and have that money and what they matched in my retirment account. I also have been saving $200 a month for the last 3 years that is in my savings account. If I have a surplus when I budget or do my cash flow, I save $200 and put the rest in mutual funds. I have invested $10,500 in mutual funds. 

 

I bought my house for $175,000, but it is already appraising for $180,000. My mortgage is for $150,000. I got a 3% interest rate over 30 years, so my monthly payment including taxes is $800 a month. Insurance is $900 a year, but I pay it monthly. Electric is about $75 a month and water is $25.Food generally is around $400 a month. My car payment is $250/month and car insurance of $50/month and gas of $200/month. My cell phone is $50/month, clothes average $50/month and fun money is about $100/month. I tithe 10% of my gross income every month. 

 

As far as what I own, my checking account is currently at $1,600. I have a life insurance plan that will pay out $100,000 if I die, but it has a cash value of $6,250. According to KBB, my car is worth $12,000. However, I still owe $4,000 on it. I have a credit card that I pay off every month, but the current balance is $545. I do not put the credit card payment in my cash flow or budget, as I use it to pay the items that are already budgeted that are already in my budget and cash flow like gas and food. I also own a laptop that I paid $2000 for, but it is probably worth $600 currently. I just paid $6,000 for furniture for my house.

 

Name:                                                                           
 
 Date:    
 
 
 
Personal Balance Sheet
 
 
 
 
 
 
 
Purpose: To determine your current financial position. 
 
 
 
 
 
Instructions: List the current values of the asset categories below; list the amounts owed for various liabilities;  
 
 
subtract total liabilities from total assets to determine net worth.
 
Suggested websites: 
time.com/money
 
 
www.thesimpledollar.com
 
Suggested apps:
Simple Balance Sheet, Personal Capital
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance Sheet as of  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets 
 
 
 
 
 
 
 
 Liquid assets
 
 
 
 
 
 
 
Checking account balance
 
$0.00
 
 
 
 
 
 Savings/money market accounts, funds
 
$0.00
 
 
 
 
 
Cash value of life insurance
 
$0.00
 
 
 
 
 
Other
 
 
$0.00
 
 
 
 
 
Total liquid assets
 
 
$0.00
 
 
 
 
Household assets and possessions
 
 
 
 
 
 
 
 
 
Current market value of home
 
$0.00
 
 
 
 
 
 
 
Market value of automobiles
 
$0.00
 
 
 
 
 
Furniture
 
$0.00
 
 
 
 
 
Computer, electronics, camera
 
$0.00
 
 
 
 
 
Jewelry
 
$0.00
 
 
 
 
 
Other
 
 
$0.00
 
 
 
 
 
Other
 
 
$0.00
 
 
 
 
 
Total household assets
 
 
$0.00
 
 
 
 
Investment assets
 
 
 
 
 
 
 
Savings certificates
 
$0.00
 
 
 
 
 
Stocks and bonds
 
$0.00
 
 
 
 
 
Retirement accounts
 
$0.00
 
 
 
 
 
Mutual funds
 
$0.00
 
 
 
 
 
Other
 
 
$0.00
 
 
 
 
 
Total investment assets
 
 
$0.00
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
 
 
$0.00
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
Current liabilities
 
 
 
 
 
 
 
Charge account and credit card balances
 
$0.00
 
 
 
 
 
Loan balances
 
$0.00
 
 
 
 
 
Other
 
 
$0.00
 
 
 
 
 
Other
 
 
$0.00
 
 
 
 
 
Total current liabilities
 
 
$0.00
 
 
 
 
Long-term liabilities
 
 
 
 
 
 
 
Mortgage
 
$0.00
 
 
 
 
 
Other
 
 
$0.00
 
 
 
 
 
Total long-term liabilities
 
 
$0.00
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total liabilities
 
 
$0.00
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Worth
 
 
$0.00
 
 
 
 
(assets minus liabilities)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
What's Next for your Personal Financial Plan?
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
* Compare your net worth to previous balance sheets.
 
 
 
 
 
 
* Decide how often you will prepare a balance sheet.
 
 
 
 
 
 
Name:                                                                           
 
 Date:    
 
 
 
 
Personal Cash Flow Statement
 
 
 
 
 
 
Purpose: To maintain a record of cash inflows and outflows for a month (or three months). 
 
 
 
 
Instructions: Record inflows and outflows of cash for a one- (or three-) month period.
 
 
 
 
Suggested websites: 
cashmoneylife.com
www.thesimpledollar.com
www.choosetosave.oorg/asec/
 
Suggested app:
 
Expensify, Prism Pay Bills, Expense Keep, Every Dollar
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For month ending
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash Inflows
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Salary (take-home)
 
 
$0.00
 
 
 
 
 
Other income :
 
 
$0.00
 
 
 
 
 
Other income :
 
 
$0.00
 
 
 
 
 
Total Income
 
 
 
 
$0.00
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash Outflows
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed expenses
 
 
 
 
 
 
 
 
Mortgage or rent
 
 
$0.00
 
 
 
 
 
Loan payments
 
 
$0.00
 
 
 
 
 
Insurance
 
 
$0.00
 
 
 
 
 
Other
 
 
 
$0.00
 
 
 
 
 
Other
 
 
 
$0.00
 
 
 
 
 
Total fixed outflows
 
 
 
 
$0.00
 
 
Variable expenses
 
 
 
 
 
 
 
 
Food
 
 
$0.00
 
 
 
 
 
Clothing
 
 
$0.00
 
 
 
 
 
Electricity
 
 
$0.00
 
 
 
 
 
Telephone
 
 
$0.00
 
 
 
 
 
Water
 
 
$0.00
 
 
 
 
 
Transportation
 
 
$0.00
 
 
 
 
 
Personal care
 
 
$0.00
 
 
 
 
 
Medical expenses
 
 
$0.00
 
 
 
 
 
Recreation/entertainment
 
 
$0.00
 
 
 
 
 
Gifts
 
 
$0.00
 
 
 
 
 
Donations
 
 
$0.00
 
 
 
 
 
Other
 
 
 
$0.00
 
 
 
 
 
Other
 
 
 
$0.00
 
 
 
 
 
Total variable outflows
 
 
 
 
$0.00
 
 
 
 
 
 
 
 
 
 
 
Total Outflows
 
 
 
 
$0.00
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Surplus (Deficit)
 
 
 
 
$0.00 
 
 
Allocation of surplus
 
 
 
 
 
 
 
 
Emergency fund savings
 
 
 
 
 
 
 
Financial goals savings
 
 
 
 
 
 
 
Other savings
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
What's Next for your Personal Financial Plan?
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
* Decide which areas of spending need to be revised.
 
 
 
 
 
 
 
* Evaluate your spending patterns for preparing a budget.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Name:                                                                           
 
 Date:    
 
 
 
Annual Budget Summary
 
 
 
 
 
 
Purpose: To see an overview of spending patterns for a year.
 
 
 
 
 
Instructions: Record the monthly budget amount in the first column and actual monthly spending in the appropriate column.
 
Suggested websites: 
www.mymoney.gov
 
www.bls.gov/cex
 
Suggested apps:
 
Mint
 
 
 
 
 
 
 
Monthly Budget
Actual Spending
Jan
Feb
Mar
Apr
May 
Jun
INCOME
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
EXPENSES:
 
 
 
 
 
 
 
 
Savings
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Mortgage/rent
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Housing costs
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Telephone
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Food (at home)
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Food (away)
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Clothing
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Transportation
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Credit payments
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Insurance
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Health care
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Recreation
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Reading/education
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Gifts/donations
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Miscellaneous
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Other
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Other
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Total Expense
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Surplus (Deficit)
$0.00 
$0.00 
$0.00 
$0.00 
$0.00 
$0.00 
$0.00 
 
 
Actual Spending
Year Totals
Jul
Aug
Sep
Oct
Nov
Dec
Actual
Budget
INCOME
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
EXPENSES:
 
 
 
 
 
 
 
 
Savings
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Mortgage/rent
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Housing costs
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Telephone
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Food (at home)
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Food (away)
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Clothing
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Transportation
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Credit payments
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Insurance
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Health care
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Recreation
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Reading/education
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Gifts/donations
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Miscellaneous
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Other
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Other
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Total Expense
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
Surplus (Deficit)
$0.00 
$0.00 
$0.00 
$0.00 
$0.00 
$0.00 
$0.00
$0.00
 
 
 
 
 
 
 
 
 
 
What's Next for your Personal Financial Plan?
 
 
 
 
 
 
* Decide which areas of spending need to be revised.
 
 
 
 
 
 
* Evaluate your spending patterns for preparing a budget.