=+LG 4 P4–11 Preparation of cash budget Sam and Suzy Sizeman need to prepare a cash budget for the last quarter of 2020 to make sure they can cover their expenditures during the period. Sam and Suzy have been preparing budgets for the past several years and have been able to identify the percentage of their income that they pay for most of their cash outflows. These percentages are based on their take-home pay (e.g., monthly utilities normally run 5% of monthly take-home pay). The information in the following table can be used to create their fourth-quarter budget for 2020.

Income Monthly take-home pay $4,900 Expenses Housing 30.0%

Utilities 5.0%

Food 10.0%

Transportation 7.0%

Medical/dental 0.5%

Clothing for October and November 3.0%

Clothing for December $ 440 Property taxes (November only) 11.5%

Appliances 1.0%

Personal care 2.0%

Entertainment for October and November 6.0%

Entertainment for December $1,500 Savings 7.5%

Other 5.0%

Excess cash 4.5%