I need to prepare a cash flow statement and determine total cash inflows and total cash outflows.
Rent for the month $650
Monthly take home salary $1,950
Cash in checking account $450
Savings account balance $1,890
Spending for food $345
Balance of educational loans $2,160
Current value of automobile $7,800
Telephone bill paid for the month $65
Credit card balance $235
Loan payment $80
Auto insurance $230
Household posessions $3,400
Stereo equipment $2,350
Payment for electricity $90
Lunches/parking at work $ 180
Donations $70
Home computer $1,500
Value of stock investment $860
Clothing purchase $110
Restaraunt spending $130
Here is what I have thus far
Income (cash inflows)
Salary $1,950
Stock investment $860
Cash Outflows
Fixed Expenses
Rent $650
Telephone $65
Loan payment $80
Auto insurance $230
Total fixed outflows $375
Variable Expenses
Lunches/parking at work $180
Restaurant spending $130
Clothing $110
Donations $70
Electricity $90
Food $345
I need some help categorizing the remaining expenses. Thanks in advance for your help
The accounts I haven't placed on my cash flow sheet are:
Cash in checking acct- $450
Savings acct balance- $1,890
Balance of educational loan - $2,160
Current value of automobile - $7,800
Credit card balance - $235
Household posessions - $3,400
Stereo Equipment - $2,350
Home computer - $1,500
*** I can do the cash flow statement however, I need help deciding where to place these entries***
To categorize the remaining expenses, let's analyze each one:
1. Balance of educational loans ($2,160): This can be classified as a debt payment. Add it to the "Loan payment" under the fixed outflows category.
2. Current value of automobile ($7,800): Since this is the current value of your asset, it doesn't impact your cash flow in the short term and can be excluded from the cash inflows and outflows.
3. Savings account balance ($1,890): Savings are typically not considered as cash inflows or outflows since they represent funds set aside and not actively spent. Exclude it from both categories.
4. Cash in checking account ($450): Add this to the "Income" under the cash inflows category.
5. Credit card balance ($235): This represents the outstanding balance on your credit card. Include it as a variable expense under the "Credit card payments" category.
6. Household possessions ($3,400): This represents the value of your assets at home and doesn't directly reflect your cash inflows or outflows. Exclude it from both categories.
7. Stereo equipment ($2,350): Similar to household possessions, this represents an asset and doesn't affect your cash inflows or outflows in the short term. Exclude it from the categories.
8. Home computer ($1,500): Similar to stereo equipment, this is an asset and doesn't impact your cash inflows or outflows in the short term. Exclude it from the categories.
9. Payment for electricity ($90): This is an essential utility expense. Add it to the "Electricity" category under variable expenses.
10. Value of stock investment ($860): This represents the value of your stock investment and doesn't directly affect your cash inflows or outflows. Exclude it from the categories.
11. Lunches/parking at work ($180): This is already included in the variable expenses category, so you don't need to categorize it again.
12. Donations ($70): You have correctly categorized this expense under variable expenses.
13. Clothing purchase ($110): You have correctly categorized this expense under variable expenses.
14. Restaurant spending ($130): This expense is already included in the variable expenses category, so you don't need to categorize it again.
By categorizing the remaining expenses, your updated cash inflows and outflows will look as follows:
Income (cash inflows):
- Salary: $1,950
- Cash in checking account: $450
- Stock investment: $860
Cash Outflows:
Fixed Expenses:
- Rent: $650
- Telephone: $65
- Loan payment: $80
- Auto insurance: $230
Variable Expenses:
- Lunches/parking at work: $180
- Restaurant spending: $130
- Clothing: $110
- Donations: $70
- Electricity: $90
- Food: $345
- Credit card payments: $235
I hope this helps you categorize the remaining expenses correctly.