Personal Budget
Memorandum
To: Mr. Burns, Monty Burns and Company Accounting Firm
From: CPA
Date: October 1, 2012
Subject: Personal Budget, Balance Sheet and Cash Flow Statement When one examines financial success for an individual or business what are the attributes does one inspect? Would you look at the individual’s or businesses’ gross income? Perhaps one can examine the educational level of the individuals to determine their financial success? Or maybe it is the individual’s drive and risk appetite that created their success? Maybe, success can be attributed towards the individual’s ability to design and implement that plan? Ultimately, each one of these questions plays a pivotal role in the success of an individual or business. The purpose of this memorandum is for the couple of Homer and Marge Simpson. Upon initial consultation with Homer and Marge, liquidity was a major concern. Both expressed interest in freeing up money in order to save for retirement. We will analyze Homer and Marge’s personal budget, their balance sheet and cash flow statements. There will be a series of recommendations that will free cash flow and help Homer and Marge obtain their desired goals. Homer is currently 31 and his wife, Marge is 30. The Simpsons have three children Bart, Lisa and Margret. Homer has a bachelor’s degree in physics and he is three classes short of completing his master’s in nuclear physics and from there he plans on obtaining a PhD. Marge has a double bachelor’s degree in marketing and economics. Homer works for the Springfield Power Plant, as a nuclear technician and his annual income is $75,000. Homer is in-line for a promotion which would increase his annual salary 15%. He contributes 3% of his annual income towards his company’s 401(k). He has no other retirement plans. Marge owns a small bakery that has a business formation as a sole proprietorship. Marge’s bakery has no other employees and the business has gross sales of $150,000 and a net profit of
To: Mr. Burns, Monty Burns and Company Accounting Firm
From: CPA
Date: October 1, 2012
Subject: Personal Budget, Balance Sheet and Cash Flow Statement When one examines financial success for an individual or business what are the attributes does one inspect? Would you look at the individual’s or businesses’ gross income? Perhaps one can examine the educational level of the individuals to determine their financial success? Or maybe it is the individual’s drive and risk appetite that created their success? Maybe, success can be attributed towards the individual’s ability to design and implement that plan? Ultimately, each one of these questions plays a pivotal role in the success of an individual or business. The purpose of this memorandum is for the couple of Homer and Marge Simpson. Upon initial consultation with Homer and Marge, liquidity was a major concern. Both expressed interest in freeing up money in order to save for retirement. We will analyze Homer and Marge’s personal budget, their balance sheet and cash flow statements. There will be a series of recommendations that will free cash flow and help Homer and Marge obtain their desired goals. Homer is currently 31 and his wife, Marge is 30. The Simpsons have three children Bart, Lisa and Margret. Homer has a bachelor’s degree in physics and he is three classes short of completing his master’s in nuclear physics and from there he plans on obtaining a PhD. Marge has a double bachelor’s degree in marketing and economics. Homer works for the Springfield Power Plant, as a nuclear technician and his annual income is $75,000. Homer is in-line for a promotion which would increase his annual salary 15%. He contributes 3% of his annual income towards his company’s 401(k). He has no other retirement plans. Marge owns a small bakery that has a business formation as a sole proprietorship. Marge’s bakery has no other employees and the business has gross sales of $150,000 and a net profit of