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CONCEPTS IN FED.TAX.,2020-W/ACCESS

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter11: Property Dispositions

Section: Chapter Questions

Problem 75IIP

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Jamie Lee Jackson, age 27, full-time student and part-time bakery employee, has just moved into a bungalow - style,
unfurnished home of her own. The house is only a one-bedroom, but the rent is manageable and has plenty of room
for Jamie Lee. She decided to give notice to her roommate that she would be leaving the apartment and the shared
expenses after the incident with the stolen checkbook and credit cards a few weeks back. Jamie had dip in to her
emergency savings account to help cover the deposit and moving expenses, as she had not planned to move out of the
apartment and be on her own this soon. Jamie is in need of a few appliances, as there is a small laundry room, but no
washer or dryer, nor is there a refrigerator in the kitchen. She will also need a living room set and a television because
the only furniture she currently has is a bedroom suite. Jamie is so excited to finally have the say in how she will furnish
the bungalow, and she began shopping for her home as soon as the lease was signed. The home appliance store, Acme
Home Goods, was the first stop as Jamie chose a stacking washer and dryer set, which would fit comfortably in the
laundry space provided. A stainless steel refrigerator was her next choice, and the salesperson quickly began to write up
the order. Jamie was informed that if she opened up a credit card through the appliance store that she would receive a
discount of 10% off her total purchase. As she waited for her credit to be approved, she decided to continue shopping for
her other needed items. Living room furniture was next on the list as Jamie went to the local home furnishings retailer
who had endless choices of complete sofa sets that included the coffee and end tables as well as matching lamps. Jamie
chose a contemporary - style set and, again, was offered the tempting deal of opening a credit card through the store in
exchange for a percentage off her purchase and free delivery. On to the big box retailer where Jamie then chose a
52" 1080p LED HDTV. For the third time, a percentage off her first purchase at the big box retailer was all that was
needed to get Jamie to sign on the dotted line of the credit card application. Jamie Lee wants to determine if she can
afford the monthly payments for all of her purchases before she completes the application process. Use the information
below to determine her debt payment - to - income ratio. Current Financial Situation Assets: Income: Checking account $
1,850 Gross monthly salary $2,800 Savings account $7,300 Net income $2,185 Emergency fund savings account $
2,800 Monthly Expenses: IRA balance $420 Rent obligation $360 Car $2,900 Utilities/Electric $75 Liabilities: Utilities/
Water $45 Student loan $10,900 Utilities/Cable $70 (Jamie is still a full-time student, so no payments are required on
the loan until after graduation) Food $130 Gas/Maintenance $135 Credit card payment $0 Acme Home Goods (Washer/
dryer and refrigerator) $1,600 Acme Home Goods $40 Local Home Furnishings (Sofa set) $1,700 Local Home
Furnishings $44 Big Box Store (52" LED HDTV) $1,100 Big Box Store $28

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