The Caldwell Herald newspaper reported the following story: Frank Ormsby of Caldwell is the state's newest millionaire. By choosing the six winning numbers on last week's state lottery, Mr. Ormsby won the week's grand prize totaling $1.02 million. The State Lottery Commission indicated that Mr. Ormsby will receive his prize in 20 annual installments of $51,000 each. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables. Required: 1. If Mr. Ormsby can invest money at a 7% rate of return, what is the present value of his winnings? (Enter your answer in dollars an not in millions of dollars.) Present value
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- The Caldwell Herald newspaper reported the following story: Frank Ormsby of Caldwell is the state’snewest millionaire. By choosing the six winning numbers on last week’s state lottery, Mr. Ormsby has wonthe week’s grand prize totaling $1.6 million. The State Lottery Commission has indicated that Mr. Ormsbywill receive his prize in 20 annual installments of $80,000 each.Required:1. If Mr. Ormsby can invest money at a 12% rate of return, what is the present value of his winnings?2. Is it correct to say that Mr. Ormsby is the “state’s newest millionaire”? Explain your answer.Mavis Wanczyk (53) of Chicopee, MA was the sole winner of the $758.7 million Powerball jackpot on August 23, 2017. It was the largest jackpot prize won on a single ticket in U.S. lottery history. She was given the choice of either receiving a one-time lump sum payment of $480,500,936 upfront or an annuity. The annuity option distributes the jackpot of $758.7 million over 30 annual payments, which increase by 5% each year to keep up with the costs of living. The first payment of the annuity is paid immediately and the subsequent payments are paid at an annual frequency. Thus, the (undiscounted) sum of the annuity payments equals the jackpot amount of $758.7 million. a. What are the values of the first and the last payments of the annuity option? b. Compute the present value of the annuity payments if Mrs. Wanczyk has a discount rate of 4%. C, What considerations besides the present value computed above should Mrs. Wanczyk take into account when deciding between a lump-sum payment and…This year (2022), Evan graduated from college and took a job as a deliveryman in the city. Evan was paid a salary of $75,000 and he received $700 in hourly pay for part-time work over the weekends. Evan summarized his expenses as follows: Cost of moving his possessions to the city (125 miles away) Interest paid on accumulated student loans Cost of purchasing a delivery uniform Cash contribution to State University deliveryman program $1,200 2,980 1,580 1,390 Calculate Evan's AGI and taxable income if he files single. Assume that interest payments were initially required on Evan's student loans this year. Evan's AGI Taxable income
- Today is July 17, 2020. 200 years ago, on July 17, 1820, Jeb Springfield established a (RDFund) for his town, with these rules: Rule 1. Money withdrawn from the RDF can be spent for anything the town wants. Rule 2. A withdrawal of money from the RDF is permitted only once every 100years. Here is the RDF’s history July 17, 1820 Jeb Springfield contributes $2 to establish the RDF. July 17, 1821 Inspired by Jeb’s gift, the citizens (as a group) make the first of 100 annual $1 contributions. July 17, 1920 The citizens make their final $1 contribution; no more money is ever contributed to the RDF. July 17, 1920 They withdraw 90% of the RDF’s money and use it to create Springfield College. July 17, 2020 The town is considering withdrawal from the RDF. Assume the RDF earns a return of 12% (EAY) on its money. answer questions: (A) On July 17, 1920, before the withdrawal (after final $1 contribution), how much money in the RDF? (B) Springfield College used half of the RDF…The Alumni Association of a university desires to award 730,000 pesos scholarship annually to deserving students for as long as its scholarship fund shall last. The fund was started on July 1, 2018 by a donor in the amount five times of 730,000. The Alumni Association invested this sum at that time at 8% per annum and plans on adding an amount of 1000 per year to fund from its dues starting July 1, 2019 for as long as awards are made. For how many years starting July 1, 2019 can scholarship be awarded?During 2021, Ellen Evans, made cash contributions, as listed below. Cash contribution to her church Cash contribution to the government of the of Virginia Commonwealth Cash contribution to the Democratic party Ellen also made in-kind contributions, as listed below. $ 4,000 Contribution of used clothing to the Salvation Army (market value of $300, basis of $1,900) Contribution of XYZ, Inc. capital stock with a long-term holding period (market value of $10,000, basis of $7,000) Finally, Ellen, a self employed attorney, performed 10 hours of legal services for her church at no charge. Assume that Ellen normally charges $250 per hour for her services. 18,300 15,300 None of the above 1,000 500 Assuming that Ellen has substantial adjusted gross income and that the charitable contribution percentage limitation is not an issue, what total charitable contribution amount may Ellen claim on her 2019 Form 1040? A $ 15,800 B 17,800 C D E
- a. Josh borrowed $87,000 from First State Bank using his business assets as collateral. He used the money to buy City of Blanksville bonds. Over the course of a year, Josh paid interest of $13,300 on the borrowed funds, but he received $12,000 of interest on the bonds. Deductible amountThis year (2023), Evan graduated from college and took a job as a deliveryman in the city. Evan was paid a salary of $79,700 and he received $700 in hourly pay for part-time work over the weekends. Evan summarized his expenses as follows: Cost of moving his possessions to the city (125 miles away) Interest paid on accumulated student loans. Cost of purchasing a delivery uniform Contribution to State University deliveryman program $ 1,200 2,960 1,560 1,380 Calculate Evan's AGI and taxable income if he files single. Assume that interest payments were initially required on Evan's student loans this year. Evan's AGI Taxable income5) A lottery administrator has just completed the state's most recent $50 million lottery. Receipts from lottery sales were $50 million and the payout will be $5 million at the end of each year for 10 years. The expenses of running the lottery were $800,000. The state can earn an annual compound rate of 8 percent on any funds invested. (a) Calculate the gross profit to the state from this lottery. (b) Calculate the net profit to the state from this lottery (no taxes).
- Residents of the town of Sunny View, Arizona authorized a $5,000,000 renovation to theirhistoric town hall on November 15, 2022. Financing for the project consists of $2,500,000 froma 5 percent serial bond issue, $1,500,000 from a state grant, and $1,000,000 from the GeneralFund. Debt service for the serial bonds will be provided by a one-quarter-cent city sales taximposed on every dollar of sales in the city. Required: Complete the necessary journal entries to record the related transactions in the town's capitalprojects fund, debt service fund, and governmental activities at the government-wide level. Youmay ignore entries in the General Fund. The town has a calendar year-end. e. On April 1, 2023, the town issues serial bonds with a face value totaling $2,500,000 andhaving maturities ranging from one to 20 years at 102. The bonds bear interest of 5percent per annum, payable semiannually on April 1 and October 1. Premiums on bondsissued must be deposited directly in the debt service…Residents of the town of Sunny View, Arizona authorized a $5,000,000 renovation to theirhistoric town hall on November 15, 2022. Financing for the project consists of $2,500,000 froma 5 percent serial bond issue, $1,500,000 from a state grant, and $1,000,000 from the GeneralFund. Debt service for the serial bonds will be provided by a one-quarter-cent city sales taximposed on every dollar of sales in the city. Required: Complete the necessary journal entries to record the related transactions in the town's capitalprojects fund, debt service fund, and governmental activities at the government-wide level. Youmay ignore entries in the General Fund. The town has a calendar year-end. n. The sales tax collections for debt service amounted to $250,000. o. Central Paving and Construction gave a final billing to the town for $2,000,000. Upon last inspection by the Public Works Department, a leak was discovered in the roof.p. Public works employees installed a new sidewalk and landscaping at a…Residents of the town of Sunny View, Arizona authorized a $5,000,000 renovation to theirhistoric town hall on November 15, 2022. Financing for the project consists of $2,500,000 froma 5 percent serial bond issue, $1,500,000 from a state grant, and $1,000,000 from the GeneralFund. Debt service for the serial bonds will be provided by a one-quarter-cent city sales taximposed on every dollar of sales in the city. Required: Complete the necessary journal entries to record the related transactions in the town's capitalprojects fund, debt service fund, and governmental activities at the government-wide level. Youmay ignore entries in the General Fund. The town has a calendar year-end. a. Record the 2023 budget for the Serial Debt Service Fund. Sales taxes of $350,000 areexpected to be collected in 2023; the only appropriation is expected to be six months ofinterest of the serial bond.b. The town transfers $1,000,000 from the General Fund to a newly established capitalprojects fund.c.…