Explore BrainMass

Explore BrainMass

    Income and Expense Example: Monthly Personal Budget (Excel)

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Details: Donna and Sherman Terrel are preparing a budget for 2010. Donna is a systems analyst with an airplane manufacturer, and Sherman is working on a master's degree in educational psychology. The Terrels do not have any children or other dependents. Donna estimates her salary will be about $45,600 in 2010; Sherman expects to work only during the summer months, doing painting and remodeling work for a building contractor. He anticipates an income from those activities of $3000 a month in June, July, and August. Sherman does have a scholarship that pays his tuition and also provides $3,600 a year of which $2400 is payable in February and $1200 is payable in October. The Terrels don't expect to have any other income in 2010.

    Donna and Sherman have listed their expected total expenses in 2010 as follows:

    Housing (rent) $8,640
    Transportation 6,000
    Food (includes dining out) 9,000
    Utilities 3,000
    Payroll taxes:


    Life - payable in May
    Auto - payable in January
    Leisure and entertainment:

    Vacation in May
    Clothing 1,800
    Others $3,900
    Total Expenses $51,640

    The Terrels will begin 2010 with about $1,000 in liquid assets, and they prefer not to draw this balance below $600 at any time during the year.

    Prepare a monthly income and expense plan for the Terrels in 2010 (be sure to do the readings for the week prior to creating this plan). Also, total the income and expenses to determine their financial standing at the end of each month.
    On the basis of the plan you have just prepared, discuss the Terrels expected financial situation in 2010. Explain if you foresee any difficulties, and suggest alternatives to correct them.

    During the quarter break in April, Sherman's employer landed a major remodeling project and asked for Sherman's help. Sherman agreed, and he expects to earn $1,500 from the job before taxes but probably won't receive a check until early June. Discuss how this unexpected event might affect the Terrels' activities and their budget for the balance of 2010. It is not necessary to prepare a revised monthly income and expense plan but do refer to specific accounts and amounts (make appropriate assumptions) in your discussion

    © BrainMass Inc. brainmass.com June 4, 2020, 12:42 am ad1c9bdddf

    Solution Preview

    Attached you will find a spreadsheet with two workbooks: 1- Monthly budget and 2- calculations (used to get monthly figures).

    You will need to reformat this document to meet your teacher's requirements based on the prior week's readings.

    The Terrels will end 2010 positively with a $5,540 balance, however due to Sherman's inconsistent income and periodic large buckets of spending, there are some periods were they are negative. The Terrels start the year negatively driven by the large Auto payment (and no income from Sherman). They will need to access and utilize all of the liquid assets in January and will still be negative $795. They can return the liquid assets in February as they will receive ...

    Solution Summary

    This solution provides an example of an income and expense report (in Excel) in the form of a monthly budget. This solution addresses irregular income, non-monthly expenses, liquid assets (savings) and budget balancing.