The bank manager was pleased to see that you have a plan in place for dealing wi

Question

The bank manager was pleased to see that you have a plan in place for dealing with accounts receivables and uncollectible accounts as evidenced in your memo last week.

The bank manager now wishes to know how much you will need to borrow. You will need to prepare a budget of expenses and calculate the anticipated amount needed to cover payroll expenses for hiring a new employee before you can respond to the bank's request.

Using the Excel template below, complete the budget for expenses and the payroll worksheet. Refer to the details found on the Information tab found in the workbook to get started

Expenses Monthly Amount One-Time fee* Advertising $                     50.00 Licenses $                   100.00 Office Supplies $                   200.00 Professional Fees $                   400.00 Rent Expense $                   500.00 Subscription Expense $                     91.96 Telephone Expense $                   100.00 Website Expenses $                   150.00 Total Expenses $                   891.96 $                   700.00 *The One-Time fees will be due in July. Part-time Employee information: You have placed an ad for part-time help for 15 hours per week at $14/hour. You found a potential employee and their effective date to start would be July 1st. Assume Federal Income Tax will be withheld at a rate of 12%. When you called your State, they told you that your State Unemployment tax rate would be 5.4%. Recall that the Federal Unemployment rate is the same for all businesses. Required: Complete the Budget for Expenses worksheet Complete the Payroll Worksheet Please note that you will need the information from the Payroll Worksheet to finalize your Budget for Expenses.

Explanation / Answer

Assuming there are 4 weeks in the month Payroll Worksheets Monthly Payroll Gross Payroll 840 (15*4*14) Less : Federal Income Tax 100.8 Net Pay 739.2 The employer will have to pay $ 101 to government towards federal Income Tax Federal Unemployment Rate is 5.4% This the employer has to pay from his pocket 840*0.054 45.36 45 Expenses Monthly Amount One-Time fee* Total Expenses Advertising 50 50 Licenses 100 100 Office Supplies 200 200 Professional Fees 400 400 Rent Expense 500 500 Subscription Expense 91.96 91.96 Telephone Expense 100 100 Website Expenses 150 150 Part-Time Employee Expense 739.2 739.2 Federal Withheld tax 100.8 100.8 State Unemployment tax 45.36 45.36 Total Expenses 1777.32 700 2477.32

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