A B C a n d X Y Z a r e p r e p a r i n g t h e i r 2 0 2 3 c a s h b u d g e t . H el p t h e X Y Z r e c o n c i l e t h e f o l l o w i n g d i f f e r e n c e s , g i v i n g r e a s o n s t o s u p p o r t y o u r an s w e r s :** T h e i r o n l y s o u r c e o f i n c o m e i s A B C ’ s s a l a r y , w h i c h a m o u n t s t o ₱ 5 0 , 0 0 0 . 0 0 a m o n t h b e f o r e t a x e s . X Y Z w a n t s t o s h o w t h e ₱ 5 0 , 0 0 0 . 0 0 a s t h e i r m o n t h l y i n c o m e , w h e r e a s A B C a r g u e s t ha t h i s t a k e - h o m e p a y o f ₱ 3 3 ,9 1 7 . 0 0 i s t h e c o r r e c t v a l u e t o s h o w. X Y Z w a n t s t o m a k e a p r o v i s i o n f o r f u n m o n e y , a n i d e a t h a t A B C c a nn o t u n d e r s t a n d . H e a s k s , “ W h y d o w e n e e d f u n m o n e y w h e n e v e r y t h i n g i s p r o v i d e d f o r i n t h e b u d g e t ? ”

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

A B C a n d X Y Z a r e p r e p a r i n g t h e i r 2 0 2 3 c a s h b u d g e t . H el p t h e X Y Z r e c o n c i l e t h e f o l l o w i n g d i f f e r e n c e s , g i v i n g r e a s o n s t o s u p p o r t y o u r an s w e r s :**

T h e i r o n l y s o u r c e o f i n c o m e i s A B C ’ s s a l a r y , w h i c h a m o u n t s t o ₱ 5 0 , 0 0 0 . 0 0 a m o n t h b e f o r e t a x e s . X Y Z w a n t s t o s h o w t h e ₱ 5 0 , 0 0 0 . 0 0 a s t h e i r m o n t h l y i n c o m e , w h e r e a s A B C a r g u e s t ha t h i s t a k e - h o m e p a y o f ₱ 3 3 ,9 1 7 . 0 0 i s t h e c o r r e c t v a l u e t o s h o w.
X Y Z w a n t s t o m a k e a p r o v i s i o n f o r f u n m o n e y , a n i d e a t h a t A B C c a nn o t u n d e r s t a n d . H e a s k s , “ W h y d o w e n e e d f u n m o n e y w h e n e v e r y t h i n g i s p r o v i d e d f o r i n t h e b u d g e t ? ”

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