I’m working on a Accounting question and need guidance to help me study.
In this assignment, you will create a 12-month sample household budget showing income, expenses and the amount of money remaining each month to save or invest. In the business setting, money coming in is referred to as “Revenue,” but in the household setting, we refer to this as “Income.” Both the business and household settings use the term “Expenses.” You may use actual numbers or hypothetical numbers to complete this assignment.
The top portion of the spreadsheet shows the income that is coming into your household. The lower portion of the spreadsheet indicates the expenses you pay to operate your household. Household expenses are divided into two categories—necessary expenses and discretionary expenses. Necessary expenses are expenses that are required to operate your household such as groceries. Discretionary expenses are costs that are not required to operate your home but are things that we enjoy such as dining out or going to see a movie.
Review the sample budget for ideas on how to set yours up. Note that you may NOT duplicate this and need to come up with your own items and dollar amounts.
Create a spreadsheet following the steps below.
- Insert the name of the family that the budget is being prepared for; again, you may use your family name or a hypothetical name.
- Insert the months of January through December so that the spreadsheet shows a full 12 months.
- Under the category of Household Income, list the source of each type of income that comes into your household.
- For example, Primary Job, Second Job, Business Income, Child Support, etc.
- For each month, list the amount of money for each source of income.
- Using the Excel software, total each month vertically. You may not insert the total but must either use the Auto-Sum feature in Excel or create a formula to add the column of numbers.
- Under the category of Necessary Expenses, list the source of each type of expense that is required to operate your household.
- For each month, list the amount of money for each necessary expense.
- Under the category of Discretionary Expenses, list the source of each type of expense that is not required to operate your household but is something that you enjoy doing and for which you spend money.
- For each month, list the amount of money for each discretionary expense.
- Under the category of Results, for the line item, Amount remaining to save or invest, create a formula using the Excel software that shows how much money you have left over each month that could be saved or invested.
- For each line item be sure to provide totals for the year.
Once you complete your spreadsheet, type your answers to the following questions.
- What was the most difficult part of creating this budget? (3 points)
- Now that you have completed this assignment, will you continue to use this budget as a tool in your household? For a business or a household, what are the consequences of not creating a budget and adhering to it? (4 points)
- Under the “Results” section, did you have money available to save or invest? If you did, is the amount of money available to save or invest feasible and can you realistically put aside this money and still maintain a comfortable lifestyle? If you did not have money available to save or invest, what changes can you make to your budget that will allow you to have money left over so that your cash flow position will improve? (5 points)
Points Possible: 35
20 points for Excel budget spreadsheet
12 points for written responses
3 points for writing level