Income and Expense Statement

Name$($s$)$: Pedro and Lucy McDermott

For the year ending: As of December $31,20$XX

Dollars

Income

Wages and salaries Name: Pedro McDermott $ $40,000$

Name: Lucy McDermott $36,000$

Bonuses and commissions Pedro$$s bonus $4,000$

$(1)$ Total Income: $$80,000$

Expenses

Housing $$18,900$

Utilities Rocky Mountain Power $2,100$

AT&T $1,056$

Food Groceries $3,780$

Transportation Auto loan $7,560$

Public transportation $8,400$

Insurance $3,150$

Taxes $19,000$

Fun money Cruise to Mexico $6,000$

Parents$$ loan $2,450$

$(2)$ Total Expenses: $$72,396$

Surplus $($Deficit$)$: $$7,604$

In addition to the statement, you will need to know the following information:

$$ They estimated their net annual income $($after taxes and employer deductions$)$ at $$30,000$ for Pedro and $$27,000$ 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 round all dollar amounts to the nearest whole dollar. Enter any cash deficit with a minus sign.

Three$-$Month Cash Budget $($By Month$)$

Name$($s$)$: Pedro and Lucy McDermott

For: Three months Ending: March $31,20$XX

January February March Total for Three Months

Income

Pedro$$s salary $$2,5002,500$

Lucy$$s salary $2,2502,250$

Total income $4,750$

Expenses

Rent $1,5751,575$

Utilities:

Rocky Mountain Power $175175$

AT&T $8888$

Food $315315$

Automobile $630630$

Public transportation $700700$

Insurance $00$

Parents$$ loan $204204$

Fun money $500500$

Total expenses $4,1874,975$

Cash surplus $($deficit$)563$

Cumulative surplus $($deficit$)$ $$563$

Looking at the completed budget, what single item would you recommend that they add to their budget?

Dividend and interest income

Savings and investments

Pensions and annuities

This is because:

The couple needs to increase their distributions from their retirement plans.

The couple needs to budget for contingencies and save for future goals.

The couple needs to increase their taxable income.