1) (a) HOw much is a $20,000 investment worth at the end of 8years if it accumulates at 7%?

(b) Tom wants to retire at the end of this year (2016). His lifeexpectancy is 30 years from his retirement. Tom has come to you,his CPA, to learn how much he should deposit on December 31, 2016to be able to withdraw $50,000 at the end of each year for the next30 years, assuming the amount on deposit will earn 6% interestannualy.

(c) Judy Thomas has a $1,500 overdue debt for medical books andsupplies at Joe's Bookstore. She has only $800 in her checkingaccount and doesn't want her parents to know about this debt. Joe'stells her that she may settle the account in one of two ways sinceshe can't pay it all now:

1. Pay $600 now and $900 when she completes her residency, threeyears from today.

2. Pay $1,500 one year after completion of residency, threeyears from today.

Assuming that the cost of money is the only factor in Judy'sdecisions and that the cost of money to her is 6%, whichalternative should she choose? Your answer must be supported withcalculations.

***Please show work so I know how to find the answers.

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Patrina SchowalterLv2

28 Sep 2019

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1) Judy Thomas has a $1,500 overdue debt for medical books andsupplies at Joe's Bookstore. She has only $800 in her checkingaccount and doesn't want her parents to know about this debt. Joe'stells her that she may settle the account in one of two ways sinceshe can't pay it all now: (1) Pay $600 now and $900 when shecompletes her residency, two years from today. (2) Pay $1,500 oneyear after completion of residency, three years from today.Assuming that the cost of money is the only factor in Judy'sdecision and that the cost of money to her is 6%, which alternativeshould she choose? Your answer must be supported withcalculations.

***Please show work so I know how to find the answer.

redhamster711

Carmin Kovach is single and has two children from her previousmarriage. Anika, 9, lives with Carmin. Julius, 11, lives with hisfather, Ray. Carmin pays alimony of $400 per month to Ray. Thepayments are to continue until Julius reaches age 18, when theywill be reduced to $100. Carmin is 34 and employed as a nuclearengineer with Atom Systems Consultants, Inc. (ASCI). Her annualsalary is $80,000, and ASCI has an extensive fringe benefitsprogram for its employees. ASCI has a qualified pension plan thatcovers all employees. Under the plan, ASCI matches any contributionto the plan up to 8% of the employeeâs annual salary. Carmin makesthe maximum allowable contribution of $6,400, and it is matched byASCI. ASCI provides medical coverage to all employees but not totheir dependents. Carminâs medical coverage costs ASCI $3,000during the current year. She receives $980 in reimbursements forher medical costs. ASCI also provides employees with a flexiblebenefits plan. Carmin pays $2,500 into the plan. She uses $2,400 topurchase medical coverage for Anika. Her medical, dental, andoptometry costs not covered by insurance total $1,900; the flexiblebenefits plan reimburses her $100 for these costs. ASCI alsoprovides employees with group term life insurance of twice theirannual salary, up to a maximum coverage of $150,000. Carminâs groupterm life insurance premiums cost $400. Because of the sensitiveand sometimes dangerous nature of her work, ASCI also providesCarmin with a $300,000 whole life insurance policy. The whole lifeinsurance policy costs $490. Taking advantage of ASCIâs educationalassistance program, during the fall Carmin enrolls in two lawschool classes at a local university. ASCI pays her tuition, fees,books, and other course-related costs totaling $2,300. Carmin alsoreceives certain other fringe benefits not available to allemployees. She receives free parking in the companyâs securitygarage that would normally cost $280 per month. In addition, ASCIpays the $1,000 cost of her nuclear engineerâs license and $600 peryear in professional association dues and professional magazinesubscriptions. ASCI also pays Carminâs $900 dues to a health clubthat is located in the same building as her office. Carminroutinely enters sweepstakes contests. This year, she is notifiedthat she has won $5,000 in a breakfast cereal promotion. The prizeis to be paid equally over 10 years. She receives the first paymentDecember 28, although she doesnât deposit the check in her checkingaccount until January 3. In February, Carminâs father dies. SocialSecurity pays her $600 as a survivorâs benefit. She also receivesstock valued at $30,000 and her fatherâs house, which has a valueof $90,000, as her share of her fatherâs estate. Carmin rents outher fatherâs house on August 1. The monthly rent is $400, and thelease agreement is for one year. The lease requires the tenant topay the first and last monthsâ rent and a $400 security deposit.The security deposit is to be returned at the end of the lease ifthe property is in good condition. On August 1, Carmin receives$1,200 from the tenant per the terms of the lease agreement. InNovember, the plumbing freezes and several lines burst. The tenanthas the repairs made and pays the $300 bill. In December, hereduces his rental payment to $100 to compensate for the plumbingrepairs. Carmin pays other deductible costs for the rental thattotal $2,680. The allowable depreciation on the rental house is$1,080. Carmin owns several other investments. She receives thefollowing amounts (all in cash) from the stocks and bonds she owns:General Dynamics common stock $ 300 City of Toronto bonds 1,600State of Nebraska bonds 400 New Jersey economic development bonds300 Grubstake Mining Development stock 1,000 Carmin owns 1,000shares of Grubstake Mining Development common stock. Grubstake isorganized as an S corporation and has 100,000 shares outstanding.Grubstake reports taxable income of $200,000 during the currentyear. Carmin sells the following securities during 2013: SecuritySale Date Purchase Date Sale Price Commission Paid Basis NebraskaBonds 3/14/13 10/22/10 $1,900 $ 80 $1,710 Cassill Corporation Stock10/18/13 2/19/13 $8,900 $450 $9,630 Carmin purchased 500 shares ofGeneral Dynamics stock on July 22, 2010, at a cost of $2,200. OnJune 15, 2013, she receives 50 shares of General Dynamics stock asa dividend. The fair market value of General Dynamics stock on June15, 2013, was $3.50 per share. Carmin slips on a wet spot in frontof a computer store during the current year. She breaks her ankleand is unable to work for two weeks. She incurs $1,300 in medicalcosts, all of which are paid by the owner of the store. The storealso gives her $1,000 for pain and suffering resulting from theinjury. ASCI continues to pay her salary during the two weeks shemisses because of the accident. ASCIâs plan also pays her $1,200 indisability pay for the time she is unable to work. CalculateCarminâs adjusted gross income on her 2013 tax return. Then do oneor both of the following, according to your professorâsinstructions: a. Include a brief explanation of how you determinedeach item that affected adjusted gross income and any items youexcluded from gross income. Your solution to the problem shouldcontain a list of each item included in adjusted gross income andits amount, with the explanations attached. b. Write a letter toCarmin explaining how you determined each item that affectedadjusted gross income and any items you excluded from gross income.You should include a list of each item included in adjusted grossincome and its amount.

________1. Randy Hill wants to retire in 10 years with $500,000.He can earn 6% per year on his investments. Compute how much heneeds to deposit each year to reach his goal. ________2. Joe Morriswants to start a savings fund from which his grandson couldwithdraw $3,000 a year for 10 years. The fund would earn 5%interest. Compute the amount Joe would have to deposit now to reachhis goal. ________3. Your rich aunt has offered to finance fiveyears of college for you. The annual cost will be $30,000 and theinterest rate is 5%. Compute how much money your aunt must give younow to finance the five years of college. ________4. Assume yourfather is 55 and wants to retire at age 65 with $300,000 in aretirement fund. The interest rate is 8%. Compute how much he mustdeposit at age 55 to accumulate the $300,000. ________ 5. Assumeyou want to have $25,000 for a down payment for a house in fiveyears. Compute the amount you would need to deposit today. Yourmoney will earn 5 percent. ________ 6. Jeff Renfro is planning togo to graduate school (Ph.D) in a program of study that will takesix years. Jeff wants to have $35,000 available each year forvarious school and living expenses. He can earn 5 percent on hismoney. Compute how much he must deposit at the start of his studiesto be able to withdraw $35,000 a year for six years. ________7.Angie Baden deposits $10,000 a year into her retirement account.These funds will earn 8 percent over the 10 years until herretirement. Compute what the value of her retirement account willbe when she retires. ________8. Assume you borrow $80,000 with a 7percent interest rate, to be repaid in seven equal yearly payments.Compute the amount of each payment.

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