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PFIN 2nd Edition by Lawrence Gitman ,Michael Joehnk,Randall Billingsley
Edition 2ISBN: 978-1111821999PFIN 2nd Edition by Lawrence Gitman ,Michael Joehnk,Randall Billingsley
Edition 2ISBN: 978-1111821999 Exercise 2
Nancy and Bill Thompson are preparing their 2013 cash budget. Help the Thompsons reconcile the following differences, giving reasons to support your answers.
a. Their only source of income is Bill's salary, which amounts to $5,000 a month before taxes. Nancy wants to show the $5,000 as their monthly income, whereas Bill argues that his take-home pay of $3,917 is the correct value to show.
b. Nancy wants to make a provision for fun money , an idea that Bill cannot understand. He asks, "Why do we need fun money when everything is provided for in the budget?"
a. Their only source of income is Bill's salary, which amounts to $5,000 a month before taxes. Nancy wants to show the $5,000 as their monthly income, whereas Bill argues that his take-home pay of $3,917 is the correct value to show.
b. Nancy wants to make a provision for fun money , an idea that Bill cannot understand. He asks, "Why do we need fun money when everything is provided for in the budget?"
Explanation
Verified
Verified
a.
For the purpose of income statement, ...
PFIN 2nd Edition by Lawrence Gitman ,Michael Joehnk,Randall Billingsley
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