Personal Budget, Balance Sheet, and Cash Flow Statement

Personal Budget, Balance Sheet and Cash Flow Statement
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MEMORANDUM
Subject: Personal Budget, Balance Sheet, and Cash Flow Statement
From: Anita Brelsford
To: Mrs. Viviane Pollington
Date: 10/9/2014
Dear Mrs. Pollington,
This memorandum is prepared for the purpose of evaluating the financial situation of the client, Mrs. Pollington. The client’s personal budget, balance sheet, as well as cash flow statement are prepared, and the summary from these are presented in a concise and succinct manner. Mrs. Pollington is aged 46, recently widowed following the death of her husband, Paul Pollington one year ago. She has 4 children; Laci 23, Sharon 20, Morris 15, and Jonathan 7. Mrs. Pollington has a bachelor’s degree in Economics from the University of Texas at Austin and currently works as an accounting at a local auditing firm, where she earns $64,608 annually. She also has a business that brings her an income of $17,865 per year.
The two main concerns for my client are finishing a car loan she took with her husband, as well as the payment of school fees for her 4 children. Since the death of her husband, she has had financial difficulties considering that Mr. Paul Pollington’s annual income of $ 67,244 was very helpful in paying bills and meeting various needs and expenses, which Mrs. Pollington now has to foot all by herself. Her goals are to save adequate money so she can buy stocks, and to be able to successfully complete the mortgage.
Balance sheet for Mrs. Pollington
AssetsLiquid AssetsChecking Account Balance$6, 250Savings Account Balance$9, 660Total Liquid Assets$15, 910Real EstateMarket value of house$173,699Personal PossessionsMarket value of car$25, 731Furniture and appliances$3,100Electronic equipment $2,800Collectibles$750Total Personal Possessions $31, 631Investment AssetsRetirement Accounts$33,000Stock Investments0Total Investment assets$33,000Total Assets$254, 240LiabilitiesCurrent LiabilitiesMedical Bills $2,600Credit Card Balances$2,600Total Current Liabilities$5,400Long-term LiabilitiesMortgage $115,000Car Loan$11,000Student Loan$6,500Total Long-term Liabilities$132,500Total Liabilities$137,900Net worth (assets - liabilities)$116,340
Cash flow statement – Monthly
Cash Flow Statement for one monthIncome (Cash Flow)Take Home Pay $5,384Business Income$1,489Allowance$0Savings account interest$200Total Income$7,073Expenses (Cash Outflow)Fixed expenses (Tickets, Cable TV)$145Variable expenses (take out food, clothing, and recreation)$450
$520
$330Other expenses$5,575Total Expenses$7,020Net Cash Flow$53
Annual Personal Budget: a personal budget is basically u...