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PFIN 5th Edition by Randall Billingsley,Lawrence Gitman,Michael Joehnk
Edition 5ISBN: 978-1305661707PFIN 5th Edition by Randall Billingsley,Lawrence Gitman,Michael Joehnk
Edition 5ISBN: 978-1305661707 Exercise 2
Preparing cash budget. Raul and Felicia Ojeda are preparing their 2017 cash budget. Help the Ojedas reconcile the following differences, giving reasons to support your answers.
a. Their only source of income is Raul's salary, which amounts to $5,000 a month before taxes. Felicia wants to show the $5,000 as their monthly income, whereas Raul argues that his take-home pay of $3,917 is the correct value to show.
b. Felicia wants to make a provision for fun money , an idea that Raul doesn't understand. He asks, "Why do we need fun money when everything is provided for in the budget?"
a. Their only source of income is Raul's salary, which amounts to $5,000 a month before taxes. Felicia wants to show the $5,000 as their monthly income, whereas Raul argues that his take-home pay of $3,917 is the correct value to show.
b. Felicia wants to make a provision for fun money , an idea that Raul doesn't understand. He asks, "Why do we need fun money when everything is provided for in the budget?"
Explanation
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Cash budget is the summary of expected c...
PFIN 5th Edition by Randall Billingsley,Lawrence Gitman,Michael Joehnk
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