Vested retirement benefits (no employee contribution)………………………$6,000 — Thomas Green Laramie Wyoming has been retail salesclerk for six years age

Thomas Green, of Laramie, Wyoming, has been a retail salesclerk for six years. At age 35, he is divorced with one child, Amanda, age 7. Thomas’s salary is $46,000 per year. He regularly receives $400 per month for child support from Amanda’s mother. Thomas invests $100 each month ($50 in his mutual fund and $50 in U.S. savings bonds). Using the following information, construct a balance sheet and a cash-flow statement for Thomas.

ASSETS Amount

Vested retirement benefits (no employee contribution)………………………$6,000

Money market account (includes $150 of interest earned last year) …………..5,000

Mutual fund (includes $200 of reinvested dividend income from last year)…..5,000

Checking account………………………………………………………………1,000

Personal property………………………………………………………………5,000

Automobile……………………………………………………………………12,000

U.S. savings bonds……………………………………………………………..3,000

LIABILITIES Outstanding Balance

Dental bill (pays $25 per month and is included in uninsured medical/dental)………$ 450

Visa (pays $100 per month) ………………………………………………………….3,500

Student loan (pays $100 per month) …………………………………………………7,500

ANNUAL FIXED EXPENSES Amount

Auto insurance………………………………………………………………….$ 780

Rent……………………………………………………………………………12,000

Utilities………………………………………………………………………….2,400

iPhone…………………………………………………………………………….980

Cable…………………………………………………………………………….1400

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Internet…….……………………………………………………………………..800

Food………………………..………………………..………………………..3,v000

Uninsured medical/dental………………………..………………………..……1,000

ANNUAL VARIABLE EXPENSES Amount

Dry cleaning………………………..………………………..…………$ 480

Personal care………………………..…………………………………….420

Gas, maintenance, license………………………..……………………..2,120

Clothes………………………..………………………..…………………500

Entertainment………………………..………………………..………...2,700

Vacations/visitation/travel………………………..……………………..3,300

Child care………………………..………………………..…………….5,000

Gifts………………………..………………………..……………………400

Miscellaneous………………………..………………………..…………..300

Federal income tax………………………..…………………………….5,600

Social Security taxes………………………..…………………………..3,500

Health insurance………………………..………………………..……..2,440

SOLUTION

Based on the information provided, the balance sheet and a cash-flow statement for Thomas Green would be as follows:

Balance Sheet for Thomas Green
		Dollars	Dollars	Dollars									Percent	Percent
ASSETS	ASSETS
Monetary assets	Monetary assets
Checking account	Checking account	$ 1,000	$ 1,000	$ 1,000								2.70	2.70	2.70	2.70
Money market account	Money market account	5,000	5,000	5,000								13.51	13.51	13.51	13.51
EE savings bonds	EE savings bonds	3,000	3,000	3,000								8.11	8.11	8.11	8.11
Total	Total				$9,000	$9,000	$9,000	$9,000	$9,000	$9,000	$9,000					24.32	24.32	24.32	24.32	24.32	24.32
Tangible assets	Tangible assets
Personal property	Personal property	$ 5,000	$ 5,000	$ 5,000								13.51	13.51	13.51	13.51
Automobile	Automobile	12,000	12,000	12,000								32.43	32.43	32.43	32.43
Total	Total				17,000	17,000	17,000	17,000	17,000	17,000	17,000					45.95	45.95	45.95	45.95	45.95	45.95
Investment assets	Investment assets
Mutual fund	Mutual fund	$ 5,000	$ 5,000	$ 5,000								13,51	13,51	13,51	13,51
Vested pension benefits	Vested pension benefits	6,000	6,000	6,000								16.22	16.22	16.22	16.22
Total	Total					11,000	11,000	11,000	11,000	11,000							29.73	29.73	29.73	29.73
TOTAL ASSETS	TOTAL ASSETS				$37,000	$37,000	$37,000	$37,000	$37,000	$37,000	$37,000					100.00	100.00	100.00	100.00	100.00	100.00
LIABILITIES	LIABILITIES
Short-term liabilities	Short-term liabilities
Dental bill	Dental bill	$ 450	$ 450	$ 450								1.22	1.22	1.22	1.22
Visa	Visa	3,500	3,500	3,500								9.46	9.46	9.46	9.46
Total	Total				$ 3,950	$ 3,950	$ 3,950	$ 3,950	$ 3,950	$ 3,950	$ 3,950					10.68	10.68	10.68	10.68	10.68	10.68
Long-term liabilities	Long-term liabilities
Student loan	Student loan	$ 7,500	$ 7,500	$ 7,500								20.27	20.27	20.27	20.27
Total	Total					7,500	7,500	7,500	7,500	7,500							20.27	20.27	20.27	20.27
TOTAL LIABILITIES	TOTAL LIABILITIES				$ 11,450	$ 11,450	$ 11,450	$ 11,450	$ 11,450	$ 11,450	$ 11,450					30.95	30.95	30.95	30.95	30.95	30.95
NET WORTH	NET WORTH				$ 25,550	$ 25,550	$ 25,550	$ 25,550	$ 25,550	$ 25,550	$ 25,550					69.05	69.05	69.05	69.05	69.05	69.05
TOTAL LIABILITIES AND NET WORTH	TOTAL LIABILITIES AND NET WORTH				$37,000	$37,000	$37,000	$37,000	$37,000	$37,000	$37,000				100	100	100	100	100	100	100
Cash-Flow Statement for Thomas Green
	Dollars	Dollars						Percent	Percent	Percent	Percent	Percent	Percent
INCOME
Thomas’s salary	$46,000	$46,000							89.93	89.93	89.93	89.93	89.93
Child support	4,800	4,800							9.38	9.38	9.38	9.38	9.38
Interest and dividends	350	350							0.69	0.69	0.69	0.69	0.69
TOTAL INCOME			$ 51,150	$ 51,150	$ 51,150	$ 51,150	$ 51,150	$ 51,150						100.00	100.00	100.00	100.00	100.00
EXPENSES
Fixed expenses
Rent	$12,000	$12,000							23.46	23.46	23.46	23.46	23.46
Mutual fund	600	600							1.17	1.17	1.17	1.17	1.17
EE savings bond	600	600							1.17	1.17	1.17	1.17	1.17
Child care	5,000	5,000							9.78	9.78	9.78	9.78	9.78
Health insurance	2,440	2,440							4.77	4.77	4.77	4.77	4.77
Auto insurance	780	780							1.52	1.52	1.52	1.52	1.52
Taxes	9,100	9,100							17.79	17.79	17.79	17.79	17.79
Debt payments	2,400	2,400							4.69	4.69	4.69	4.69	4.69
Total fixed expenses			32,920	32,920	32,920	32,920	32,920	32,920						64.35	64.35	64.35	64.35	64.35
Variable expenses
Food	$ 3,000	$ 3,000							5,87	5,87	5,87	5,87	5,87
Utilities	1,200	1,200							2.35	2.35	2.35	2.35	2.35
Phone	980	980							1.92	1.92	1.92	1.92	1.92
Cable	1,400	1,400							2.74	2.74	2.74	2.74	2.74
Gas, maintenance, license	2,120	2,120							4,41	4,41	4,41	4,41	4,41
Dry cleaning	480	480							0.94	0.94	0.94	0.94	0.94
Uninsured medical/dental	1,000	1,000							1.96	1.96	1.96	1.96	1.96
Personal care	420	420							0.82	0.82	0.82	0.82	0.82
Clothes	500	500							0.98	0.98	0.98	0.98	0.98
Entertainment	2,700	2,700							5.28	5.28	5.28	5.28	5.28
Vacation/visitation travel	3,300	3,300							6.45	6.45	6.45	6.45	6.45
Gifts	400	400							0.78	0.78	0.78	0.78	0.78
Miscellaneous	300	300							0.59	0.59	0.59	0.59	0.59
Total variable expenses				17,800	17,800	17,800								34.80	34.80	34.80	34.80	34.80	34.80
TOTAL EXPENSES			$50,720	$50,720	$50,720	$50,720	$50,720	$50,720						99.15	99.15	99.15	99.15	99.15
NET GAIN			$ 430	$ 430	$ 430	$ 430	$ 430	$ 430						0.85	0.85	0.85	0.85	0.85