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Chapter $2$

Financial Planning Exercise $4$

Preparing income and expense statement

Use Worksheet $2\mathrm{.}2$ Ariana and Nicholas Peterson are about to construct their income and expense statement for the year ending December $31,2020.$ Nicholas is finishing up college and currently has no income. They have put together the following income and expense information for $2020$:

Ariana's salary $$45,000$

Reimbursement for travel expenses $1,600$

Interest on:

Savings account $110$

Bonds of Delta Corporation $70$

Groceries $4,150$

Rent $9,500$

Utilities $960$

Gas and auto expenses $650$

Nicholas' tuition, books, and supplies $3,300$

Books, magazines, and periodicals $280$

Clothing and other miscellaneous expenses $2,800$

Cost of photographic equipment purchased with charge card $2,200$

Amount paid to date on photographic equipment $1,600$

Ariana's travel expenses $1,950$

Purchase of a used car $($cost$)9,750$

Outstanding loan balance on car $7,300$

Purchase of bonds in Delta Corporation $4,900$

Using the information provided, prepare an income and expense statement for the Petersons for the year ending December $31,2020($follow the form shown in Worksheet $2\mathrm{.}2).$ Enter all expense amounts as positive values.

INCOME AND EXPENSE STATEMENT

Name$($s$)$ Ariana and Nicholas Peterson

For the $[$month or year$]$ Year Ended December $31,2020$

INCOME

Wages and salaries Name: Ariana Peterson

$

Name:

Name:

Self$-$employment income

Bonuses and commissions

Investment income Interest received

$

Dividends received

Rents received

Sale of securities

Other

Pensions and annuities

Other income Reimbursement for travel expenses

$

$($I$)$ Total Income

$

EXPENSES

Housing Rent$/$mortgage payment $($include insurance and taxes, if applicable$)$

$

Repairs, maintenance, improvements

Utilities Gas, electric, water

$

Phone

Cable TV and other

Food Groceries

$

Dining out

Transportation Auto loan payments

$

License plates, fees, etc.

Gas, oil, repairs, tires, maintenance

$

Medical Health, major medical, disability insurance $($payroll deductions or not provided by employer$)$

Doctor, dentist, hospital, medicines

Clothing Clothes, shoes, and accessories

$

Insurance Homeowner's $($if not covered by mortgage payment$)$

Life $($not provided by employer$)$

Auto

Taxes Income and social security

Property $($if not included in mortgage$)$

Appliances, furniture, and other major purchases Loan payments

$

Purchases and repairs

Personal care Laundry, cosmetics$,$ hair care

Recreation and entertainment Vacations

Other recreation and entertainment

$

Other items Nicholas' tuition, books, and supplies

$

Purchcase of Delta Corp. bonds

$

Travel expenses

$

$($II$)$ Total Expenses

$

CASH SURPLUS $($OR DEFICIT$)[($I$)-($II$)]$

$

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