Personal Finance

posted by .

Donna and Sherman Terrel are preparing a budget for 2003. 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 $39,996 in 2003; 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 2003.

Donna and Sherman have listed their expected total expenses in 2003 as follows:

Housing (rent) $6,600
Transportation 5100
Food (includes dining out) 8100
Utilities 3000
Payroll taxes:
Donna
12,000
Sherman
1500
Insurance:
Life - payable in May
720
Auto - payable in January
1,500
Leisure and entertainment:
Vacation in May
1,200
All others
1,800
Clothing 1,500
Others $3,900
Total Expenses $46,920

The Terrels will begin 2003 with about $1,000 in liquid assets, and they prefer not to draw this balance below $600 at any time during the year

What are the difficulties to this plan?
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 2003.

Can someone help me on these two questions. I can e-mail you the plan I made if it helps.


Donna and Sherman Terrel are preparing a budget for 2003. 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 $39,996 in 2003; 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 2003.

Donna and Sherman have listed their expected total expenses in 2003 as follows:

Housing (rent) $6,600
Transportation 5100
Food (includes dining out) 8100
Utilities 3000
Payroll taxes:
Donna
12,000
Sherman
1500
Insurance:
Life - payable in May
720
Auto - payable in January
1,500
Leisure and entertainment:
Vacation in May
1,200
All others
1,800
Clothing 1,500
Others $3,900
Total Expenses $46,920

The Terrels will begin 2003 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 2003.
On the basis of the plan you have just prepared, discuss the Terrels expected financial situation in 2003. Explain if you foresee any difficulties.
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 2003. 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

  • Personal Finance -

    An excel spreadsheet would be very helpful for this kind of problem.
    Set up a month-by-month income, expenditure, and net savings rows. See if problems arise.

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. Help on finance

    Donna and Sherman Terrel are preparing a budget for 2003. 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 …
  2. Grammar

    Which sentence is correct? 1. Donna is taller than I. 2. Donna is taller than me. No one at school is sure about this answer. Donna is taller than I. If you say it from your perspective you would say: I am taller than Donna. Not, Me
  3. personal finance

    Donna and Sherman Terrel are preparing a budget for 2003. 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 …
  4. Finance

    Donna and Sherman Terrel are preparing a budget for 2003. 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 …
  5. finance

    Donna and Sherman Terrel are preparing a budget for 2003. 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 …
  6. personal finance concepts

    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 …
  7. Social Studies

    In the later phases of the Civil War, General __________, running for president against Lincoln, declared that he would not make emancipation a condition of reconstruction. A. McClellan B. Meade C. Sherman D. Longstreet Is it Sherman?
  8. Physics

    Note: Take East as the positive direction. A(n) 86 kg fisherman jumps from a dock into a 131 kg rowboat at rest on the West side of the dock. If the velocity of the fisherman is 5.2 m/s to the West as he leaves the dock, …
  9. Math

    Donna will donate up to $460 to charity. The money will be divided between two charities: the City Youth Fund and the Educational Growth Foundation. Donna would like to donate at least $160 to the Educational Growth Foundation. She …
  10. Math

    Donna is one year older than her sister, and her sister is 3 years older than their brother. If the sum of their ages is 31, how old is Donna?

More Similar Questions