Cash Budgets
A cash budget is a plan of how we are going to manage our cash over
a period of time, eg, one week or one month. It records all money
received and all money spent. It is important to manage our cash to
ensure that we have enough money coming in to pay for all our
expenditure.
LAYOUT OF A CASH BUDGET
Cash Budget for J Cameron for week ending 30 June 20..
£
Opening Balance
£
100
Cash In
Pocket money
Wages from paper round
Loan from mum
40
25
10
___
175
Cash Out
Cinema
CD’s
Magazines
Swimming
Disco
Sweets
Closing Balance
12
10
2
4
15
5
__
48
___
127
===
The closing balance at the end of the cash budget will become the
opening balance at the start of the next cash budget.
1
Cash Budgets
Exercise 1
From the following information, prepare the cash budget for John
McCann for week ending 20 January 20..
£
Cash at the start of the week
Pocket money
Swimming
Cinema
Magazines
Loan from dad
Disco
CD’s
Sweets
30
20
5
10
2
20
10
10
1
Remember to
check the
accuracy of your
work!
Exercise 2
From the following information, prepare the cash budget for Jennifer
Scott for week ending 11 February 20..
£
Cash at the start of the week
Wages from paper round
Make-up
Birthday present for sister
Café
CD
Youth club entrance fee
McDonalds meal
Swimming
40
25
10
10
5
8
2
6
4
Your work should
always be
presented neatly
and be error free!
2
Exercise 3
From the following information, prepare the cash budget for James
McArthur for week ending 18 February 20..
£
Cash at the start of the week
Wages
Swimming
Cinema
CD’s
Present for Dad
Magazines
Loan from mum
Concert ticket
Clothes
Cash withdrawn from bank
65
60
5
10
18
12
2
25
20
20
45
Remember to
check the
accuracy of your
work!
Exercise 4
From the following information, prepare the cash budget for Jack
Samuels for week ending 20 March 20..
£
Cash at the start of the week
Wages
Clothes
Football match
Compact discs
10-pin bowling
Take-away food
Loan from Aunt Jean
Paid into the bank
Cinema
60
50
20
10
15
10
4
15
10
10
Your work should
always be
presented neatly
and be error free!
3
Exercise 5
From the following information, prepare the cash budget for Ellen
McEwan for week 1, week 2 and week 3.
Remember the closing balance for week 1 will become the opening
balance for week 2. The closing balance for week 2 will become the
opening balance for week 3.
Week 1
Cash at the start of the week
Wages
Disco
Clothes
Birthday present for friend
Withdrew from bank
£
100
50
10
20
15
10
Week 2
Cash at the start of the week
Wages
Cinema
Lunch
Loan from mum
Magazine
Train fares
£
?
50
10
10
25
4
3
Remember to
check the
accuracy of your
work!
Week 3
Cash at the start of the week
Wages
Repaid part of loan to mum
Clothes
Disco
Lunch with friends
Books
£
?
50
10
15
10
8
10
Your work should
always be
presented neatly
and be error free!
4
Exercise 6
From the following information, prepare the cash budget for Jack Frost
for week 1, week 2 and week 3.
Remember the closing balance for week 1 will become the opening
balance for week 2. The closing balance for week 2 will become the
opening balance for week 3.
Week 1
Cash at the start of the week
Wages
Golf trip
Football match
Loan from friend
New tennis racket
£
160
100
30
10
50
40
Week 2
Cash at the start of the week
Wages
Theatre
Golf balls
Repaid part of the loan to friend
Magazine
Bus fares
£
?
100
20
12
30
1.95
1.50
Remember to
check the
accuracy of your
work!
Week 3
Cash at the start of the week
Wages
Lunch with friends
CD
Visit to fun fair
New tyre for bike
Books
£
?
100
8.50
5.99
12.50
15
5.99
Your work should
always be
presented neatly
and be error free!
5
Personal Finance – Balance Sheets
Balance Sheet
A balance sheet is a list of assets and liabilities. It is prepared to calculate
a persons net worth.
Fixed Assets
These are items of value that are likely to last for more than one full year,
for example, a computer, bike or guitar.
Current Assets
These are assets of value that are likely to change regularly within a year,
for example cash or money in the bank is likely to change throughout the
year depending on your spending.
Current Liabilities
These are amounts owing (debts) that will have to be paid back usually
within a year, for example a loan from a parent or friend.
Net Current Assets
This is the difference between our current assets and our current
liabilities.
Net Worth
Net worth is calculated by adding all of our assets (fixed and current) and
subtracting all of our liabilities.
Net Worth = Assets - Liabilities
Debtor
A debtor is someone who owes you money.
Creditor
A creditor is someone you owe money to.
6
Exercise 1
Copy the words and their meanings above into your jotter.
Exercise 2
Make a list of 5 assets that you have at home, eg, you may have a laptop.
Exercise 3
Copy the table below into your jotter and indicate whether each item is a
fixed asset, current asset or current liability. The first one has been done
for you.
Item
Fixed Asset
Current Asset
Current Liability
Cash
Loan from mum
Computer
Bank
Mobile phone
Snooker table
Bike
DVDs
Loan to friend
Pocket money
owing from dad
Exercise 4
Copy the table below into your jotter and state whether the following
statements are true or false. The first one has been done for you.
Statement
True
False
Wages owing to you is a current asset.
Mobile phone is a current liability
Loan to friend is a current liability
A creditor is someone who owes you money
Net worth is found by adding assets to liabilities
A computer is a fixed asset.
7
LAYOUT OF A BALANCE SHEET
Balance Sheet of John Smith as at 31 December 20..
£
£
£
Fixed Assets
Laptop
Watch
CD Collection
Bike
Golf Clubs
600
50
85
180
275
____
1190
Current Assets
Cash
Bank Account
Amount owing from dad – debtor
125
300
100
___
525
Current Liabilities
Loan from brother
Golf club fees owing
Net Current Assets
40
80
____
120
____
405
____
1595
====
Represented by
Net Worth
1595
====
8
Exercise 5
From the following information, prepare the Balance Sheet of John
Buchan for week ending 20 January 20..
Computer
Bank
Cash
Colour TV
Golf Clubs
Bicycle
Books
Computer Games
Creditor - loan from mother
Debtor – friend Jack McDaid
£
600
80
75
350
340
200
50
150
50
20
Exercise 6
From the following information, prepare the Balance Sheet of Lesley
Smith for week ending 10 February 20..
Bank
Computer
Guitar
Electric keyboard
Owing to mother – creditor
Cash
Loan given to dad – debtor
Books
CD player
DVD collection
£
400
600
150
230
60
140
130
45
80
120
9
Exercise 7
From the following information, prepare the Balance Sheet of Gillian
McKay for week ending 15 March 20..
Personal stereo
Digital camera
Mobile phone
Bank
Cash
Loan from friend – creditor
Walkman
Books
Pocket money owing from dad –
Debtor
Television
DVD’s
Ice skates
£
150
400
250
120
50
20
55
45
30
300
60
85
Exercise 8
From the following information, prepare the Balance Sheet of Sam
Mullen for week ending 15 March 20..
Bank
Loan from mother – creditor
Football boots
Bike
Radio controlled car
Telescope
Stereo system
Violin
Wages owing from paper round –
Debtor
Binoculars
Cash
Horse riding equipment
£
560
80
140
180
145
80
200
60
45
70
58
120
10
Exercise 9
From the following information, prepare the Balance Sheet of Edward
Laing for week ending 20 March 20..
Cash
Bank
Snooker table
DVD player
Golf clubs
Loan from sister – creditor
Ski equipment
Building society account
Mobile phone
Digital camera
Model train set
Loan from friend – creditor
Wages owing from Saturday job –
Debtor
Pocket money owing from mum –
Debtor
£
300
200
400
60
120
50
180
78
120
90
140
80
60
25
Exercise 10
From the following information, prepare the Balance Sheet of Celia
Barclay for week ending 5 April 20..
Football programme collection
Computer
Computer games
Hockey stick
Cash
Owing to bank – creditor
Pocket money due from mum –
Debtor
Loan to brother – debtor
Electric organ
Dartboard
Motor bike
Tennis racquet
£
120
450
50
20
58
45
30
50
400
60
450
120
11
Calculating Wages
If you are employed by someone to do a job, you get money in exchange
for the work you do. This money is called a wage or a salary and is
usually paid to you monthly or weekly. Most of the time the money is
paid directly into your bank account but sometimes you can get paid by
cheque or cash.
An employee’s GROSS PAY is calculated by multiplying the RATE OF
PAY by the number of HOURS WORKED.
Example
John Adams is paid £5.25 per hour and works for 40 hours per week. His
GROSS PAY would be calculated as follows:
£
5.25
x 40
____
210
____
Task 1
Copy the table below into your jotter and calculate the GROSS WAGES
for each employee. The first one has been done for you.
Employee Name Rate of Pay
Hours Worked
John Black
Tina McLean
Paul Brownlie
Jodie Hunter
Craig Adams
40
20
35
40
25
£5.65
£6.60
£4.95
£10.50
£7.50
Gross Pay
£226
?
?
?
?
12
Task 2
Copy the table below into your jotter and calculate the GROSS PAY for
each employee.
(Remember GROSS PAY = RATE OF PAY x HOURS WORKED)
Employee Name Rate of Pay
Hours Worked
Mary Smith
Brenda Loudon
Amanda Jones
John McPhee
Helen Brodie
Jack Silver
40
20
35
60
40
50
£8.00
£7.50
£5.00
£3.95
£4.40
£4.25
Gross Pay
£320
?
?
?
?
?
Task 3
The table below shows the GROSS PAY for each worker per week.
Copy the table below into your jotter. Calculate how many hours each
worker works in a week.
(Hint: You should divide Gross Pay by the Rate of Pay)
Employee Name Rate of Pay
Hours Worked
Gross Pay
John Brown
Mary Smith
David Main
Graham Walker
Andrew Higgins
30 hours
£150
£180
£110
£500
£229.50
£5.00
£6.00
£5.50
£10.00
£4.25
13
Task 4
Copy the table below into your jotter and calculate the GROSS PAY for
each employee.
(Remember GROSS PAY = RATE OF PAY x HOURS WORKED)
Employee Name Rate of Pay
Hours Worked
John Higgins
Louise Jonstone
Debbie Laing
Connor Smith
Jack Cairns
John Silver
40
20
35
60
40
50
£3.00
£4.50
£7.25
£5.40
£9.50
£6.00
Gross Pay
£120
?
?
?
?
?
INCOME TAX
Most employees will have some money deducted (taken off) from their
salary every month in the form of INCOME TAX. Income tax is used to
pay for services provided by the government – such as education and
healthcare. The more money an employee earns the more income tax
s/he will pay.
NATIONAL INSURANCE
Most employees will also have some money deducted from their salary
every month in the form of NATIONAL INSURANCE. National
Insurance pays for things like unemployment benefit, sickness benefit,
retirement pensions and maternity benefits.
14
Task 5
Copy the table below into your jotter and calculate the GROSS PAY for
each employee.
(Remember GROSS PAY = RATE OF PAY x HOURS WORKED)
NET PAY = GROSS PAY – INCOME TAX
Employee
Name
Jason Main
Alex Black
Harry
McLean
Elaine Hart
Jill Grant
Jamie Hutton
Rate of
Pay
£5.30
£6.90
£5.35
Hours
Worked
40
40
35
£8.45
£10.80
£4.25
35
30
35
Gross Pay
Net Pay
£212
?
?
Income
Tax
£75
£60
£40
?
?
?
£80
£85
£45
?
?
?
?
?
?
Task 6
Copy the table below into your jotter and calculate the GROSS PAY and
NET PAY for each employee.
(Remember GROSS PAY = RATE OF PAY x HOURS WORKED)
NET PAY = GROSS PAY – INCOME TAX
Employee
Name
Ellen Haig
Margaret
Bell
Jim Smith
Bill Grant
Eddie Black
Jackie Kelly
Rate of
Pay
£10.00
£12.00
Hours
Worked
25
35
£6.50
£7.50
£5.45
£8.90
20
30
40
45
Gross Pay
Net Pay
£212
?
Income
Tax
£80
£70
?
?
?
?
£35
£55
£65
£85
?
?
?
?
?
?
15
Task 7
Copy the table below into your jotter and calculate the GROSS PAY and NET PAY for each employee. The first one has
been completed for you.
GROSS PAY = RATE OF PAY x HOURS WORKED
NET PAY = GROSS PAY – INCOME TAX AND NATIONAL INSURANCE
NAME
HOURS
WORKED
40
GROSS PAY
INCOME TAX
Jack Breem
RATE OF
PAY
£8.50
£340
£75
NATIONAL
INSURANCE
£35
Jill Henderson
£10.50
35
?
£80
£40
Mary Clark
£7.50
40
?
£75
£35
John Main
£12.00
20
?
£60
£20
Hannah Smith
£6.00
40
?
£75
£35
NET PAY
£230
16
Task 8
Copy the table below into your jotter and calculate the GROSS PAY and NET PAY for each employee. The first one has
been completed for you.
GROSS PAY = RATE OF PAY x HOURS WORKED
NET PAY = GROSS PAY – INCOME TAX AND NATIONAL INSURANCE
NAME
HOURS
WORKED
35
GROSS PAY
INCOME TAX
Bill Turnbull
RATE OF
PAY
£9.00
£315
£85
NATIONAL
INSURANCE
£55
Moira Hill
£12.00
40
?
£90
£50
Sandra Black
£9.50
30
?
£65
£40
Jim Hardie
£15.50
40
?
£105
£70
Cheryl Smith
£8.00
30
?
£55
£25
NET PAY
£175
17
Savings and Interest Rates
Today there is a lot of pressure on people to save money. If you have
enough to pay for everything you need, why should you worry about
putting money aside each month? There are a variety of reasons for
saving money. Different people save for different reasons.
Task 1
Working with your partner, try to identify 4 good reasons why it is
important that people try to save some money every week/month.
(You may wish to use the Internet to help complete this task.)
The 4 main reasons for saving money on a regular basis.
Reason 1
Reason 2
Reason 3
Reason 4
When you put money into a bank account and agree to leave your
money in the account for a set period of time the bank will reward
you with interest at the end of the year.
Example
If Simon Jones deposits £200 into the bank on 1 January
2011 and agrees to leave this money in the bank until
31 December 2011 (one full year) the bank will reward him with 5%
interest. How much money will Simon then have at the end of the
year?
18
Answer
£200 x 5% = £10. Simon will get back the original £200 he deposited
plus £10 interest. In total he will be worth £210 at the end of the
year.
Task 2
Copy the table below into your jotter and calculate the amount of
interest that each customer will receive from the bank at the end of
the year. You should also show how much savings each customer will
now have in the bank at the end of the year.
Name
Savings
Deposited
Interest Rate
Interest
Earned
J Smith
£100
5%
?
Value of
Total
Savings
?
C Kelly
£600
5%
?
?
L Hamilton
£500
5%
?
?
H Loudon
£1000
5%
?
?
C Blake
£200
10%
?
?
N McPhee
£2000
5%
?
?
K Clark
£1500
2%
?
?
L Spears
£400
3%
?
?
19
CA ASSESSMENT 4B
Task 3
The Bank of Scotland has an interest rate of 4% per annum (per year)
How much interest would you receive on the following amounts of
money at the end of one full year?
(a)
£600
(c)
£500
(b)
£1,400
(d)
£1,000
Task 4 – Word Search
C
B
C
L
O
S
I
N
G
B
A
L
A
N
C
E
P
D
C
F
B
A
L
A
N
C
E
S
H
E
E
T
S
Z
S
N
Z
C
V
G
R
N
S
D
H
F
Q
D
D
V
I
N
C
O
M
E
T
A
X
N
A
K
D
H
D
C
H
E
Q
U
E
C
F
C
D
T
X
S
H
A
T
A
F
D
B
B
A
F
F
B
F
V
S
V
F
W
C
H
J
T
E
S
V
F
V
U
S
H
G
N
G
B
D
U
G
O
O
D
K
I
O
D
L
G
N
N
D
J
B
B
L
C
F
Y
R
R
P
E
K
O
F
J
O
H
G
M
G
G
D
C
I
C
X
T
H
T
E
F
L
N
P
K
A
J
H
F
I
X
E
D
A
S
S
E
T
H
N
E
I
A
A
L
N
K
D
J
H
H
B
T
B
X
A
F
K
G
I
U
J
L
Y
J
V
K
A
J
J
P
T
F
I
Y
V
G
S
H
N
Y
H
I
F
H
C
R
E
D
I
T
O
R
L
Z
I
R
Q
J
G
T
G
N
G
J
B
D
F
L
O
L
R
F
I
Q
N
O
W
S
B
R
R
S
N
K
D
E
F
L
K
S
K
B
T
A
G
S
A
L
A
R
Y
U
M
G
K
W
H
C
A
D
R
F
Y
S
S
S
Z
S
L
E
Q
R
C
U
R
R
E
N
T
A
S
S
E
T
C
P
X
Q
A
F
W
A
M
K
L
Q
Y
S
W
D
V
G
E
D
W
A
G
E
N
G
E
N
O
L
D
E
T
W
H
J
N
E
T
P
A
Y
D
S
C
B
F
C
P
M
E
R
R
E
L
K
Y
H
D
C
C
D
X
D
E
F
G
E
I
N
T
E
R
E
S
T
R
A
T
E
C
F
C
F
V
A
Q
H
Find the words below in the word search
Cash Budget
Liability
Gross Pay
Fixed Asset
National Insurance
Net Pay
Opening Balance
Balance Sheet
Bank
Income Tax
Closing Balance
Current Asset Debtor
Salary
Cheque
Rate of Pay
Wage
Savings
Cash
Creditor
Net Worth
Interest Rate
Loan
20
Successful Learners, Responsible Citizens, Confident Individuals, Effective Contributors
Active Learning
Curriculum for Excellence
S2
BUSINESS
EDUCATION
Unit 1 – Personal Finance
Bannerman High School
21