Personal Finance (MindTap Course List)
13th Edition
ISBN: 9781337099752
Author: E. Thomas Garman, Raymond Forgue
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 3, Problem 5DTM
Summary Introduction
To determine: Preparation of balance sheet and cash flow statement
Introduction:
Financial statements: It shows value of assets and liabilities of an individual or family as well as their income and expenditure. The two most useful statements are balance sheet and the cash-flow statement.
A balance sheet defines an individual’s financial position on a stated date by showing assets, liabilities and net worth.
The cash-flow statement lists income and expenditures taken place over a specific period. It statesfrom where money came and from where it went.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Review the following scenario. Use the information provided to answer questions about the taxpayers’ 2020 return.Chris (45) and Allison (46) Castillo are married, and they will file a joint return. During the year, they earned $82,500 in wages. They also had investment income consisting of:
$200 interest income from a savings account with their local bank, reported on Form 1099-INT.
$350 interest income from a certificate of deposit held with another local bank, reported on Form 1099-INT.
$250 interest income from a U.S. Treasury note, reported on Form 1099-INT.
$500 tax-exempt interest income from a municipal bond investment, reported on Form 1099-INT.
$1,700 in ordinary dividends from a mutual fund investment, reported on Form 1099-DIV.
They had no other income.
Question 1
What amount will Chris and Allison report for taxable interest on their Form 1040? The couple's partially completed Form 1040, page 1, is shown below. You may use the form to assist you in answering this…
A mother earned $18750.00 from royalties on her cookbook. She set aside 20% of this for a down payment on a new
home. The balance will be used for her son's future education. She invests a portion of the money in a bank certificate of
deposit (CD account) that earns 4% and the remainder in a savings bond that earns 7%. If the total interest earned after
one year is $900.00, how much money was invested at each rate?
How much money was invested in the CD account?
(Round to the nearest cent.)
GILB
Thomas Green, of Laramie, Wyoming, has been a retail salesclerk for six years. At age 35, he is divorced with one child, Amanda, age 7. Thomas' salary is $46,000 per year. He regularly receives $500 per month for child support from Amanda's mother. Thomas invests $100 each month ($50 in his mutual fund and $50 in U.S. savings bonds).
ASSETS
Amount
Vested retirement benefits(no employee contribution)
$ 6,000
Money market account (includes $150 of interest earned last year)
5,000
Mutual fund (includes $200 of reinvested dividend income from last year)
5,000
Checking account
1,000
Personal property
4,000
Automobile
11,500
U.S. savings bonds
3,500
LIABILITIES
Outstanding Balance
Dental bill (pays $25 per month and is included in uninsured medical/dental)
$ 450
Visa (pays $100 per month)
3,500
Student loan (pays $100 per month)
6,500
ANNUAL FIXED EXPENSES
Amount
Auto insurance
$ 780
Rent
12,000
Uninsured medical/dental
1,000
Federal income…
Chapter 3 Solutions
Personal Finance (MindTap Course List)
Ch. 3.1 - Prob. 1CCCh. 3.1 - What is the biggest financial worry of most...Ch. 3.1 - Prob. 3CCCh. 3.1 - Prob. 4CCCh. 3.2 - Prob. 1CCCh. 3.2 - Prob. 2CCCh. 3.2 - Prob. 3CCCh. 3.2 - Prob. 4CCCh. 3.2 - Which two financial ratios for evaluating...Ch. 3.3 - Prob. 1CC
Ch. 3.3 - Prob. 2CCCh. 3.4 - Prob. 1CCCh. 3.4 - Identify two money topics that you think might...Ch. 3.5 - Prob. 1CCCh. 3.5 - What are budget estimates? Offer some suggestions...Ch. 3.5 - How might one go about revising budget estimates...Ch. 3.5 - Prob. 4CCCh. 3.5 - Name different ways to handle budget variances.Ch. 3 - Prob. 1DTMCh. 3 - Calculating Net Worth and Net Surplus. Jennifer...Ch. 3 - Ratio Analyses. Now that Jennifer better...Ch. 3 - Prob. 4DTMCh. 3 - Prob. 5DTMCh. 3 - Prob. 6DTMCh. 3 - Prob. 1FPCCh. 3 - Prob. 2FPCCh. 3 - Prob. 3FPCCh. 3 - Prob. 4FPCCh. 3 - Prob. 5FPCCh. 3 - Prob. 1BYOPFMCh. 3 - Prob. 4BYOPFMCh. 3 - Prob. 5BYOPFMCh. 3 - Prob. 7BYOPFMCh. 3 - Prob. 10BYOPFMCh. 3 - Prob. 11BYOPFM
Knowledge Booster
Similar questions
- A mother earned $17500.00 from royalties on her cookbook. She set aside 20% of this for a down payment on a new home. The home balance will be used for her sons future education. She invests a portion of the money in a bank certificate of deposit (CD account) that earns 4% and the remainder in a savings bond that earns 7%. If the total interest earned after one year is $840.00, how much money was invested at each rate? How much money was invested in the CD account? (Round to the nearest cent.) How much money was invested in the savings bond? (Round to the nearest cent.)arrow_forwarda mother earned $15000.00 from royalties on her cookbook. She set aside 20% of this for a down payment for a new home. The balance will be used for her son's future education. She invested a portion of the money in a bank certificate of a deposit (cd account) that earns 4% and the remainder in a savings bond that earns 7%. IF the total interest earned after one year is $720.00, how much money was invested at each rate?arrow_forward[The following information applies to the questions displayed below.) On January 1 of year 1, Arthur and Aretha Franklin purchased a home for $2.04 million by paying $290,000 down and borrowing the remaining $1.75 million with a 5.6 percent loan secured by the home. The Franklins paid interest only on the loan for year 1, year 2, and year 3 (unless stated otherwise). Note: Enter your answers in dollars and not in millions of dollars. Do not round intermediate calculations. Leave no answer blank. Enter zero if applicable. Problem 14-48 Part b (Algo) b. What is the amount of interest expense the Franklins may deduct in year 2 assuming year 1 is 2022? I Deductible interest expensearrow_forward
- Jennifer has the transactions below, what is the combined impact on her net worth when considering all of the transactions? She purchases $5,000 worth of a mutual fund with cash from her savings account. She spends $6,000 on a two-week vacation to Italy using funds in her money market account. She purchases $10,000 worth of furniture for her house and uses her credit card to finance the purchase. A. $21,000 decrease in net worth B. $6,000 decrease in net worth C. $15,000 increase in net worth D. $6,000 increase in net wortharrow_forwardJules deposits $70 each month into a 4010d savings account paying 3.59% annually, and her employer matches 50%. After 43 years, she'll have $128.646.55 in her account. How much more is in the account than what Jules invested? Type your answer...arrow_forwardSuppose you are28 and married. You and your spouse file for income taxes jointly. You are in the 25% tax bracket. You are considering a few personal investment issues. Which one of the followings is likely to be the best investmentinyour 401 (k) account? _____ a. Municipal bonds b. 1-year Treasury notes c. Stock mutual funds d .Annuitiesarrow_forward
- Marty has weekly gross earnings of $684.20. He is married filing jointly. He lives in Tennessee, which has no State Withholding Tax. He also makes a credit union deposit of $20.00 into savings every check. Find Marty’s weekly net earnings for this pay period.arrow_forwardKwaku Addo earns $4200 per month take-home pay and has the funds directly deposited in his checking account. He spends only about $3500 per month, and the excess funds have been building up in his account for about one year. (a) What other types of accounts are available to Kwaku? (b) How might he manage his accounts to earn as much interest as possible and keep his money safe? (c) How might he use electronic money management to accomplish these tasks?arrow_forwardBy using the information below, please help me with questions 1 through 6. PLEASE EXPLAIN THOROUGHLY FOR A BETTER UNDERSTANDING THANK YOU!! PLEASE ASSIST ME WITH THE FOLLOWING 6 QUESTIONS USING THE PROVIDED INFORMATION BELOW. THANK YOU! Lillian and Jackson Clark are a married couple in their early 20s living in Los Angeles. Jackson Clark earned $93,000 in 2018 from his sales job. During the year, his employer withheld $11,685 for income tax purposes. In addition, the Clarks received interest of $350 on a joint savings account, $750 interest on tax-exempt municipal bonds and dividends of $400 on common stocks. At the end of 2018, the Clarks sold two stocks, A and B. Stock A was sold for $700 and had been purchased four months earlier for $800. Stock B was sold for $1,500 and had been purchased 3 years earlier for $1,100. Although his company's pension plan covers Jackson, he plans to contribute $5,500 to a traditional deductible IRA for 2018. Their only child, Carter, age 2, received…arrow_forward
- Consider the following transactions occurring during a given fortnight. Remi's wage for his casual job is $600, paid on his bank transaction account (transaction 1); his scholarship allowance for studying is $150, paid on his bank transaction account (transaction 2); he pays a rent of $250 through a bank account transfer (transaction 3); the coupons on his portfolio of bonds pays $70 on his transaction account (transaction 4); he receives $350 in his transaction account for selling shares he had bought at $300 (transaction 5); he buys a TV worth $920 with his debit card (transaction 6). Draw Remi's balance sheet and represent how the six transactions above have affected it. Use one single balance sheet, indicate the value of the variations (sign followed by a number) and use only one name for each item [example: equity name appears only once even if several transactions are under equity] No explanations are required. How much of the funding of the TV comes from current savings…arrow_forwardHadiya Benzema is reviewing her assets and liabilities. What is her net worth? Assets: Cash in checking account, $1,000 Cash in savings account, $2,800 Current value of investments in U.S. savings bonds, $4,000 Current value of investments in stocks & mutual funds, $9,700 Current cash value of life insurance, $7,300 Current value accrued pension benefit, $25,000 Current value of house, $155,000 Current value of furniture and appliances, $8,000 Current value of jewelry, $600 Current value of automobile, $7,200 Liabilities: Current unpaid bills, $800 Home mortgage unpaid balance, $100,000 Auto loan unpaid balance, $3,200 Property Taxes owed, $1,000 Home improvement loan balance, $1,200arrow_forwardA professor has two daughters that he hopes will one day go to college. Currently, in-state students at the local University pay about $20,246.00 per year (all expenses included). Tuition will increase by 4.00% per year going forward. The professor's oldest daughter, Sam, will start college in 16 years, while his youngest daughter, Ellie, will begin in 18 years. The professor is saving for their college by putting money in a mutual fund that pays about 8.00% per year. Tuition payments are at the beginning of the year and college will take 4 years for each girl. (Sam's first tuition payment will be in exactly 16 years) The professor has no illusion that the state lottery funded scholarship will still be around for his girls, so how much does he need to deposit each year in this mutual fund to successfully put each daughter through college. (ASSUME that the money stays invested during college and the professor will make his last deposit in the account when Sam, the OLDEST daughter,…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
