Kathy Bourne is an advertising specialist for Success Advertising, Inc. Her annual salary is $42,000, of which
Question:
Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 500
Automobile payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250
Food . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .240
Automobile gasoline and maintenance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .140
Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Clothing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 90
Entertainment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
Total monthly expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,590
Required:
1. Prepare Kathy’s monthly budget, assuming that the car payments will continue for about three years.
2. Assume that Kathy would like to accumulate savings of $12,000 in order to take an extended leave from her job to travel and take advertising courses. How long will it take her to save the needed amount? (Ignore interest earnings, and assume that she has no savings at the present time.)
3. Interpretive Question: If Kathy asked you for advice on how she might reduce her expenses, what would you suggest?
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Related Book For
Accounting concepts and applications
ISBN: 978-0538745482
11th Edition
Authors: Albrecht Stice, Stice Swain
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