Question

1. One of your financial planning clients, Ms Yana Bordeaux has asked you to prepare specified personal financial statements on her behalf. Yana is a 33 year-old employed landscape gardener and has a gross income of $55,000 for the 2016 financial year. In addition, Yana’s employer also contributes 9.25% of her gross income into a personal superannuation fund that you have set up to fund her retirement. Fortnightly salary deductions (based on gross income) for Yana are as follows:

            Details                                                 Percentage

            Taxation                                              20

            Personal super contributions               7

            Health cover                                        3

            Union fees                                           2

           

Other expenditures incurred by Yana for the 2016 financial year are as follows:

Details                                  Amount ($)                   

Household expenses                    10,000

Mortgage loan repayments          12,000

Credit card repayments                 8,000

Entertainment expenses               5,000

Yana has also provided a list of her assets and liabilities based on the information that she currently has available as shown below:

Details                                                 Amount ($)                

Assets -

House and personal effects                 400,000

Superannuation                                   160,000

Car                                                       10,000

Savings account                                  2,000

Liabilities -

Mortgage loan                                     250,000

Credit card balance                             10,000

(a)        Prepare a personal cash flow budget for Yana for the 2016 financial year based on the information provided.

(b)        Prepare a current personal balance sheet for Yana based on the information provided.

Answer 1

Cash flow
Gross income	=	55000
Deduction
Union fee	2% of gross income	-1100
Health cover	3% of gross income	-1650
Personal contribution to superannuation	7% of gross income	-3850
Income before tax	Gross income - Deductions	48400
Tax @20%	20% of income befor tax	-9680
Net income after tax	=	38720
Expenses
Household exp	=	10000
Mortage loan repayment	=	12000
Credit card repayment	=	8000
entertainment exp	=	5000
Total expense	Sum of all expenses	35000
Net savings	Net income after tax - Total expenses	3720

Balance sheet
Liabilty			Asset
Mortgage loan	250000		House & personal effect	400000
credit card balance	10000		Superannuation	160000
Household exp	10000		car	10000
Mortage loan repayment	12000		saving account	2000
Credit card repayment	8000		Cash	3720
entertainment exp	5000		Employer contribution to Superannuation	5087.5
Tax	9680
Union fee	1100
Health cover	1650
Personal contribution to superannuation	3850
Total equity	269527.5
Total liabilty	580807.5		Total Asset	580807.5