Question

One of your financial planning clients, Ms Yvette Bordeaux wants to know what her net worth amounts to. Yvette is a 33 year-old employed landscape gardener and has a gross income of $55,000 for the 2020 financial year. In addition, Yvette’s employer also contributes 9.5% of her gross income into a personal superannuation fund that you have set up to fund her retirement. Fortnightly salary deductions (based on gross income) for Yvette are as follows:

Details	Percentage
Taxation	20
Personal super contributions over an above the superannaution guarentee	7
Health cover	3
Union fees	2

Other expenditures incurred by Yvette for the 2018 financial year are as follows:

Details	Amount ($)
Household expenses	10,000
Mortgage loan repayments	12,000
Credit card repayments	8,000
Entertainment expenses	5,000

Yvette has also provided a list of her assets and liabilities based on the information that she currently has available as shown below:

Details	Amount ($)
Assets -
House and personal effects	400,000
Superannuation	160,000
Car	10,000
Savings account	2,000
Liabilities -
Mortgage loan	250,000
Credit card balance	10,000

Prepare a current personal balance sheet for Yvette based on the information provided.       

Answer 1

Cash flow
Gross income		55000
Deduction
Union fee	(55,000 * 2%)	-1,100
Health cover	(55,000 * 3%)	-1,650
Personal contribution to superannuation	(55,000 * 7%)	-3,850
Income before tax	(Gross income – Deductions)	48,400
Tax @20%	(48,400 * 20%)	-9,680
Net income after tax		38,720
Expenses
Household exp		10,000
Mortage loan repayment		12,000
Credit card repayment		8,000
entertainment exp		5,000
Total expense		35,000
Net savings	38,720 – 35,000	3720

Balance Sheet:

Liabilities:
Mortgage loan	250,000
credit card balance	10,000
Household exp	10,000
Mortgage loan repayment	12,000
Credit card repayment	8,000
entertainment exp	5,000
Tax	9,680
Union fee	1,100
Health cover	1,650
Personal contribution to superannuation	3,850
Total equity	269,527.50
Total liabilities	580,807.50
Assets:
House & personal effect	400,000
Superannuation	160,000
car	10,000
saving account	2,000
Cash	3,720
Employer contribution to Superannuation	5,087.50
Total Assets	580,807.50

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