Westonci.ca is the premier destination for reliable answers to your questions, provided by a community of experts. Explore comprehensive solutions to your questions from a wide range of professionals on our user-friendly platform. Join our platform to connect with experts ready to provide precise answers to your questions in different areas.
Sagot :
Certainly, let's go through the points step by step.
### 1. Difference between an Income-and-Expenditure Statement and a Budget
Income-and-Expenditure Statement:
- Definition: It records actual income received and expenses incurred over a specific period, usually a month.
- Purpose: To analyze past financial activity and understand spending habits.
- Nature: Historical, reflecting what has already happened.
- Example: The total expenses and income documented for the previous month are an income-and-expenditure statement.
Budget:
- Definition: It is a plan for expected income and anticipated expenses for a future period.
- Purpose: To allocate funds in advance and manage spending according to financial goals.
- Nature: Forward-looking, predicting what will happen.
- Example: Planning how to spend the available income in the upcoming month, considering factors like inflation.
### 2. Budget for the Next Month
Given:
- Income = R 200
- Expenses and their monthly inflation-adjusted values (8% per year)
#### Calculation:
Annual Inflation Rate: 0.08
Monthly Inflation Factor:
[tex]\[ (1 + \text{Annual Inflation Rate})^{1/12} \][/tex]
Let's adjust the expenses for the next month including the inflation:
Movies:
[tex]\[ 30.00 \times \text{inflation factor} = 30.193020903300102 \][/tex]
Sweets and Fast Food:
[tex]\[ 76.75 \times \text{inflation factor} = 77.24381181094276 \][/tex]
Cold Drinks:
[tex]\[ 40.10 \times \text{inflation factor} = 40.35800460741114 \][/tex]
Clothes:
[tex]\[ 110.95 \times \text{inflation factor} = 111.66385564070488 \][/tex]
Magazines:
[tex]\[ 54.05 \times \text{inflation factor} = 54.397759327445684 \][/tex]
Transport:
[tex]\[ 18.50 \times \text{inflation factor} = 18.619029557035063 \][/tex]
Sport:
[tex]\[ 20.00 \times \text{inflation factor} = 20.12868060220007 \][/tex]
Gifts:
- Original expense for one gift: R 50.00
- Adjusted for two gifts:
[tex]\[ 2 \times (50.00 \times \text{inflation factor}) = 100.64340301100034 \][/tex]
#### Total Adjusted Expenses:
[tex]\[ 30.193020903300102 + 77.24381181094276 + 40.35800460741114 + 111.66385564070488 + 54.397759327445684 + 18.619029557035063 + 20.12868060220007 + 100.64340301100034 = 453.24756546004005 \][/tex]
### a) Budget for the Next Month:
[tex]\[ \begin{array}{|l|r|} \hline \text{Item} & \text{Expense (R)} \\ \hline \text{Income} & 200.00 \\ \hline \text{Movies} & 30.19 \\ \hline \text{Sweets and Fast Food} & 77.24 \\ \hline \text{Cold Drinks} & 40.36 \\ \hline \text{Clothes} & 111.66 \\ \hline \text{Magazines} & 54.40 \\ \hline \text{Transport} & 18.62 \\ \hline \text{Sport} & 20.13 \\ \hline \text{Gifts (Two)} & 100.64 \\ \hline \text{Total Expenses} & 453.25 \\ \hline \end{array} \][/tex]
### b) Savings Calculation:
[tex]\[ \text{Income - Total Adjusted Expenses} = 200.00 - 453.25 = -253.25 \][/tex]
### Result:
If your income remains the same at R 200, the total expenses for the next month, accounting for inflation and buying two gifts, would be R 453.25. This would result in a deficit (negative savings) of R 253.25 by the end of the next month.
### 1. Difference between an Income-and-Expenditure Statement and a Budget
Income-and-Expenditure Statement:
- Definition: It records actual income received and expenses incurred over a specific period, usually a month.
- Purpose: To analyze past financial activity and understand spending habits.
- Nature: Historical, reflecting what has already happened.
- Example: The total expenses and income documented for the previous month are an income-and-expenditure statement.
Budget:
- Definition: It is a plan for expected income and anticipated expenses for a future period.
- Purpose: To allocate funds in advance and manage spending according to financial goals.
- Nature: Forward-looking, predicting what will happen.
- Example: Planning how to spend the available income in the upcoming month, considering factors like inflation.
### 2. Budget for the Next Month
Given:
- Income = R 200
- Expenses and their monthly inflation-adjusted values (8% per year)
#### Calculation:
Annual Inflation Rate: 0.08
Monthly Inflation Factor:
[tex]\[ (1 + \text{Annual Inflation Rate})^{1/12} \][/tex]
Let's adjust the expenses for the next month including the inflation:
Movies:
[tex]\[ 30.00 \times \text{inflation factor} = 30.193020903300102 \][/tex]
Sweets and Fast Food:
[tex]\[ 76.75 \times \text{inflation factor} = 77.24381181094276 \][/tex]
Cold Drinks:
[tex]\[ 40.10 \times \text{inflation factor} = 40.35800460741114 \][/tex]
Clothes:
[tex]\[ 110.95 \times \text{inflation factor} = 111.66385564070488 \][/tex]
Magazines:
[tex]\[ 54.05 \times \text{inflation factor} = 54.397759327445684 \][/tex]
Transport:
[tex]\[ 18.50 \times \text{inflation factor} = 18.619029557035063 \][/tex]
Sport:
[tex]\[ 20.00 \times \text{inflation factor} = 20.12868060220007 \][/tex]
Gifts:
- Original expense for one gift: R 50.00
- Adjusted for two gifts:
[tex]\[ 2 \times (50.00 \times \text{inflation factor}) = 100.64340301100034 \][/tex]
#### Total Adjusted Expenses:
[tex]\[ 30.193020903300102 + 77.24381181094276 + 40.35800460741114 + 111.66385564070488 + 54.397759327445684 + 18.619029557035063 + 20.12868060220007 + 100.64340301100034 = 453.24756546004005 \][/tex]
### a) Budget for the Next Month:
[tex]\[ \begin{array}{|l|r|} \hline \text{Item} & \text{Expense (R)} \\ \hline \text{Income} & 200.00 \\ \hline \text{Movies} & 30.19 \\ \hline \text{Sweets and Fast Food} & 77.24 \\ \hline \text{Cold Drinks} & 40.36 \\ \hline \text{Clothes} & 111.66 \\ \hline \text{Magazines} & 54.40 \\ \hline \text{Transport} & 18.62 \\ \hline \text{Sport} & 20.13 \\ \hline \text{Gifts (Two)} & 100.64 \\ \hline \text{Total Expenses} & 453.25 \\ \hline \end{array} \][/tex]
### b) Savings Calculation:
[tex]\[ \text{Income - Total Adjusted Expenses} = 200.00 - 453.25 = -253.25 \][/tex]
### Result:
If your income remains the same at R 200, the total expenses for the next month, accounting for inflation and buying two gifts, would be R 453.25. This would result in a deficit (negative savings) of R 253.25 by the end of the next month.
Thanks for using our service. We aim to provide the most accurate answers for all your queries. Visit us again for more insights. Thanks for using our service. We're always here to provide accurate and up-to-date answers to all your queries. Westonci.ca is your trusted source for answers. Visit us again to find more information on diverse topics.
