Question

Suzanne is a 28-year-old BYU graduate. She pays her bills on time, has managed to save a little in a mutual fund, and (with the help of her parents) managed a down payment on a condo. Assume that all her short-term and long-term liabilities are paid except for credit cards; she pays all expenses on her credit cards, and the balances given represent her average monthly balances. Note that her paycheck is net of taxes only and her average tax rate is 15% on gross earnings. Her gross salary = net salary / (1 – average tax rate).

Monthly paycheck, net	$3,000	Unpaid Visa bill	$500
Individual Stocks (total)	$4,500	Unpaid MasterCard bill	$245
Annual Medical expenses	$252	Monthly Mortgage payment	$600
Mutual Fund holdings (total)	$2,000	401k Retirment (total)	$4,500
Car payment, monthly	$265	Monthly Utilities	$275
Savings Account (total)	$2,500	Clothing expense, monthly	$45
Monthly tithes and offerings	$424	Monthly 401k Savings	$100
Checking account (total)	$825	Auto insurance, quarterly	$450
Inherited coin collection	$3,250	Condo appraised value	$65,000
Condo mortgage owed	$60,000	Food, monthly	$225
Auto (Kelly Blue Book)	$9,000	Furnishings	$5,500
Auto loan outstanding	$4,225	Other personal property	$8,000
Other expenses, monthly	$150	Average tax rate	15%

1.

Prepare a monthly income statement for Suzanne (using the better method).

Prepare a balance sheet for Suzanne.

Answer 1

Income Statement
Monthly paycheck, Gross			3,530
Monthly 401k Savings			100.00
Total Income			3,630.00
Less: Expenses -
Annual Medical expenses			21.00
Car payment, monthly			265.00
Monthly tithes and offerings			424.00
Other expenses, monthly			150.00
Unpaid Visa bill			500.00
Unpaid MasterCard bill			245.00
Monthly Mortgage payment			600.00
Monthly Utilities			275.00
Clothing expense, monthly			45.00
Auto insurance, monthly			150.00
Food, monthly			225.00
Total Expenses			2,900.00
Net Income before tax			730.00
Less: Tax @15 %			110
Income after Tax			620

Balance sheet
Income after Tax			620.00
Individual Stocks (total)			4500
Mutual Fund holdings (total)			2000
Auto (Kelly Blue Book)			9000
Inherited coin collection			3250
Total Liabilities -
Auto loan outstanding			4225
Unpaid Visa bill			500
Unpaid MasterCard bill			245
Condo mortgage owed			60000
TOTAL			84,340.00
Total Assets -
Checking account (total)			825
401k Retirment (total)			4500
Condo appraised value			65000
Furnishings			5500
Other personal property			8000
TDS			515
TOTAL			84,340.00