7. Preparing a cash budget Pedro and Lucy started to create a budget (based on last year's income and expense statement) but got stuck. They know that you have learned how to create budgets and are asking for your help. They would like you to input the correct values for the first three months of next year. Income and Expense Statement Name(s): Pedro and Lucy McDermott For the year ending: As of December 31, 20XX Dollars Income Wages and salaries $ 21,000 Name: Pedro McDermott Name: Lucy McDermott Pedro's bonus 18,900 2,100 $42,000 Bonuses and commissions (1) Total Income: Expenses Housing Utilities $5,400 600 Puget Sound Energy Verizon Groceries Auto loan Food Transportation Public transportation 300 1,050 4,320 2,400 900 9,975 2,500 Insurance Taxes Fun money Cruise to Mexico Income and Expense Statement Name(s): Pedro and Lucy McDermott For the year ending: As of December 31, 20XX Dollars Income Wages and salaries $ 21,000 Name: Pedro McDermott Name: Lucy McDermott Pedro's bonus 18,900 Bonuses and commissions 2,100 $42,000 (1) Total Income: Expenses Housing Utilities $5,400 600 300 Food Transportation Puget Sound Energy Verizon Groceries Auto loan Public transportation 1,080 4,320 2,400 Insurance 900 9,975 Cruise to Mexico 2,500 Taxes Fun money Parents' loan (2) Total Expenses: Surplus (Deficit): 700 $28,175 $13,825 In addition to the hat In addition to the statement, you will need to know the following information: They estimated their net annual income (after taxes and employer deductions) at $15,750 for Pedro and $14,175 for Lucy Insurance is paid at the end of each calendar quarter Lucy purchases her commuter pass on the first of each month The parents' loan is money they borrowed from Lucy's parents to pay off their student loans. How much they pay each month is determined by them The fun money listed on the statement is the money spent for a cruise to Mexico. They didn't keep track of any other entertainment expenses (such as dinners out and movies) incurred during the year. Enter a value in each blank cell to get full credit for this exercise and mun all dollar amount the national Cat Enter a value in each blank cell to get full credit for this exercise, and round all dollar amounts to the nearest whole dollar. Enter any cash delict with a minus sign Three-Month Cash Budget (By Month) Name(s): Pedro and Lucy McDermott For: Three months Ending: March 31, 20xx January February March Total for Three Months Income Pedro's salary $1,313 1,313 Lucy's salary 1,181 5 1,181 Total income 2,494 Expenses Rent 450 450 Utilities: Puget Sound Energy SO 50 Verizon 25 25 s 5 Food 90 90 Automobile 360 360 Public transportation 200 13 200 Insurance 0 0 5 Parents' loan 58 58 Fun money 208 208 Total expenses 1,441 + 1,666 Cash surplus (deficit) 1,053 Cumulative surplus (deficit) $1,053 5 . Looking at the completed budget, what single Item would you recommend that they add to their budget? Utilities: 50 S 50 25 25 $ $ 90 $ 90 360 360 $ 200 $ 200 $ Puget Sound Energy Verizon Food Automobile Public transportation Insurance Parents' loan Fun money Total expenses Cash surplus (deficit) Cumulative surplus (deficit) 0 0 $ 58 58 S 208 208 $ $ 1,441 5 1,666 $ 1,053 $ S $ $1,053 $ $ 5 Looking at the completed budget, what single Item would you recommend that they add to their budget? Savings and investments Dividend and interest income Pensions and annuities This is because: The couple needs to increase their taxable income. The couple needs to budget for contingencies and save for future goals. The couple needs to increase their distributions from their retirement plans