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Code of Federal Regulations (Last Updated: November 8, 2024) |
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Title 24 - Housing and Urban Development |
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Subtitle B - Regulations Relating to Housing and Urban Development |
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Chapter XX - Office of Assistant Secretary for Housing - Federal Housing Commissioner, Department of Housing and Urban Development |
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Part 3500 - REAL ESTATE SETTLEMENT PROCEDURES ACT |
Appendix E to Part 3500 - Arithmetic Steps
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I. Example Illustrating Aggregate Analysis:
ASSUMPTIONS:
Disbursements:
$360 for school taxes disbursed on September 20
$1,200 for county property taxes:
$500 disbursed on July 25
$700 disbursed on December 10
Cushion: One-sixth of estimated annual disbursements
Settlement: May 15
First Payment: July 1
Step 1—Initial Trial Balance
Aggregate pmt disb bal Jun 0 0 0 Jul 130 500 −370 Aug 130 0 −240 Sep 130 360 −470 Oct 130 0 −340 Nov 130 0 −210 Dec 130 700 −780 Jan 130 0 −650 Feb 130 0 −520 Mar 130 0 −390 Apr 130 0 −260 May 130 0 −130 Jun 130 0 0 Step 2—Adjusted Trial Balance
[Increase monthly balances to eliminate negative balances]
Aggregate pmt disb bal Jun 0 0 780 Jul 130 500 410 Aug 130 0 540 Sep 130 360 310 Oct 130 0 440 Nov 130 0 570 Dec 130 700 0 Jan 130 0 130 Feb 130 0 260 Mar 130 0 390 Apr 130 0 520 May 130 0 650 Jun 130 0 780 Step 3—Trial Balance With Cushion
Aggregate pmt disb bal Jun 0 0 1040 Jul 130 500 670 Aug 130 0 800 Sep 130 360 570 Oct 130 0 700 Nov 130 0 830 Dec 130 700 260 Jan 130 0 390 Feb 130 0 520 Mar 130 0 650 Apr 130 0 780 May 130 0 910 Jun 130 0 1040 II. Example Illustrating Single-Item Analysis
ASSUMPTIONS:
Disbursements:
$360 for school taxes disbursed on September 20
$1,200 for county property taxes:
$500 disbursed on July 25
$700 disbursed on December 10
Cushion: One-sixth of estimated annual disbursements
Settlement: May 15
First Payment: July 1
Step 1—Initial Trial Balance
Single-item Taxes School taxes pmt disb bal pmt disb bal June 0 0 0 0 0 0 July 100 500 −400 30 0 30 August 100 0 −300 30 0 60 September 100 0 −200 30 360 −270 October 100 0 −100 30 0 −240 November 100 0 0 30 0 −210 December 100 700 −600 30 0 −180 January 100 0 −500 30 0 −150 February 100 0 −400 30 0 −120 March 100 0 −300 30 0 −90 April 100 0 −200 30 0 −60 May 100 0 −100 30 0 −30 June 100 0 0 30 0 0 Step 2—Adjusted Trial Balance (Increase Monthly Balances To Eliminate Negative Balances)
Single-item Taxes School taxes pmt disb bal pmt disb bal Jun 0 0 600 0 0 270 Jul 100 500 200 30 0 300 Aug 100 0 300 30 0 330 Sep 100 0 400 30 360 0 Oct 100 0 500 30 0 30 Nov 100 0 600 30 0 60 Dec 100 700 0 30 0 90 Jan 100 0 100 30 0 120 Feb 100 0 200 30 0 150 Mar 100 0 300 30 0 180 Apr 100 0 400 30 0 210 May 100 0 500 30 0 240 Jun 100 0 600 30 0 270 Step 3—Trial Balance With Cushion
Single-Item Taxes School taxes pmt disb bal pmt disb bal Jun 0 0 800 0 0 330 Jul 100 500 400 30 0 360 Aug 100 0 500 30 0 390 Sep 100 0 600 30 360 60 Oct 100 0 700 30 0 90 Nov 100 0 800 30 0 120 Dec 100 700 200 30 0 150 Jan 100 0 300 30 0 180 Feb 100 0 400 30 0 210 Mar 100 0 500 30 0 240 Apr 100 0 600 30 0 270 May 100 0 700 30 0 300 Jun 100 0 800 30 0 330 [59 FR 53908, Oct. 26, 1994, as amended at 60 FR 8816, Feb. 15, 1995. Redesignated at 61 FR 58479, Nov. 15, 1996; 73 FR 68259, Nov. 17, 2008]