Personal Finance (MindTap Course List)
13th Edition
ISBN: 9781337099752
Author: E. Thomas Garman, Raymond Forgue
Publisher: Cengage Learning
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Question
Chapter 3, Problem 5DTM
Summary Introduction
To determine: Preparation of
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.
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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
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.)
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
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