Create a Yearly Cash Flow Statement Fred wants to invest in his sons new busines
ID: 2766834 • Letter: C
Question
Create a Yearly Cash Flow Statement
Fred wants to invest in his sons new business. In order to be certain that Fred will be able to make the payments on a loan, the bank has asked Fred for a yearly cash flow statement. The following is Fred’s personal data that you can use to create a yearly cash flow statement. All numbers below are expressed per year
Wages/Annual Salary $105,000
401K Plan Contributions Paid $12,000
Property Taxes Paid $3,500
Gift to Bob’s Children $2,000
Interest on CD Received $2,000
State Income Tax Paid $1,000
Education/Tuition Expenses Paid $4,000
Utilities (Gas, Water, and Electric) Paid $6000
Clothing Expense Paid $2,500
Credit Card Payments $2,000
Mortgage Loan Payments $11,600
Payroll Deducted Health Insurance Contributions $2,000
Gasoline for Vehicles Paid $3,200
Federal Income Tax Paid $23,000
Grocery Store Expenses $6,000
Social Security & Medicare Taxes Paid $7,103
Homeowners Insurance Premium $3,000
Charitable Contributions Paid $10,500
Investment Plan Contributions Paid $4,000 (Consider this to be a Fixed Expense)
Travel/Vacation Expenses Paid $2,500
CASH FLOW STATEMENT
Sources of Cash
Total Sources of Cash
Uses of Cash
Payroll Deductions
Total Payroll Deductions
Fixed Expenses
Total Fixed Expenses
Variable Expenses
Total Variable Expenses
Total Expenses
Positive/(negative) Yearly Cash Flow
CASH FLOW STATEMENT
Sources of Cash
Total Sources of Cash
Uses of Cash
Payroll Deductions
Total Payroll Deductions
Fixed Expenses
Total Fixed Expenses
Variable Expenses
Total Variable Expenses
Total Expenses
Positive/(negative) Yearly Cash Flow
Explanation / Answer
CASH FLOW STATEMENT Sources of Cash Wages/Annual Salary 105,000 Interest on CD Received 2000 Total Sources of Cash 107,000 Uses of Cash Payroll Deductions 401K Plan Contributions Paid 12000 Payroll Deducted Health Insurance Contributions 2000 State Income Tax Paid 1000 Federal Income Tax Paid 23000 Social Security & Medicare Taxes Paid $7,103 7103 Total Payroll Deductions 45103 Fixed Expenses Property taxed paid 3500 Education/Tuition Expenses Paid 4000 Mortgage Loan Payments 11600 Homeowners Insurance Premium 3000 Investment Plan Contributions Paid 4000 Total Fixed Expenses 26100 Variable Expenses Gift to Bob’s Children 2000 Utilities (Gas, Water, and Electric) Paid 6000 Clothing Expense Paid 2500 Credit Card Payments 2000 Gasoline for Vehicles Paid 3200 Grocery Store Expenses 6000 Charitable Contributions Paid 10500 Travel/Vacation Expenses Paid 2500 Total Variable Expenses 34700 Total Expenses 105903 Positive/(negative) Yearly Cash Flow 1,097