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Define budget, list one fixed expense, calculate emergency fund (10% of R5000), define income and expenditure, and verify if a R550 birthday gift is correct based on R4500 salary and R5000 total incom

Accounting

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2 parts
1.3

R500\text{R}500

1.5

INCORRECT\text{INCORRECT}

Step-by-step solution

5 steps

Part 1.1

A budget is a financial plan that estimates an individual's or organization's income and expenditure over a specific future period.

Part 1.2

One fixed expense is *Rent

Part 1.3

R500\text{R}500

  1. Identify the total income.

    The total income is given as R5 000.

  2. Calculate the emergency fund (A), which is 10% of the total income.

    A=10%×R5 000A = 10\% \times \text{R}5\,000 A=0.10×R5 000A = 0.10 \times \text{R}5\,000 A=R500A = \text{R}500

    The value of A is R500\boxed{\text{R}500}.

Part 1.4

  • Income refers to the money received, especially on a regular basis, for work or through investments.
  • Expenditure refers to the money spent on goods, services, or to settle debts.

Part 1.5

INCORRECT\text{INCORRECT}

  1. Calculate the actual value of the birthday gift (B) based on the total income and salary.

    Total Income=Salary+Birthday gift (B)\text{Total Income} = \text{Salary} + \text{Birthday gift (B)} R5 000=R4 500+B\text{R}5\,000 = \text{R}4\,500 + B

  2. Solve for B.

    B=R5 000−R4 500B = \text{R}5\,000 - \text{R}4\,500 B=R500B = \text{R}500

  3. Compare the calculated value of B with Mrs Ketiwe's statement.

    Mrs Ketiwe states her birthday gift (B) is R550. Our calculation shows B is R500.
    Therefore, her statement is INCORRECT\boxed{\text{INCORRECT}}.

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