# solution

Prepare a balance sheet for them as of December 31, 2021 assuming the following information that Mary has gleaned from bank and investment account statements, life insurance contracts, a household inventory, and real estate documents. The biggest asset they own is their home. They purchased the home a few years ago for \$225,000. The tax assessed value (used to calculate their property taxes is \$250,000. A very recent appraisal was done on the property by an expert, independent real estate appraiser and showed an estimated market value of \$300,000. The appraisal was done because the couple were thinking about refinancing their home mortgage but decided to wait a bit longer. Currently, the mortgage balance on the home is \$200,000 and they owe \$1,500 in property taxes as of 12/31/21. A small home improvement loan balance, which they used to fix up a bathroom, is \$2,000. They borrowed the money from Johnâ€™s Dad who wonâ€™t demand repayment for another 2 years.

Mary reviews the bank statement and sees that their checking account balance as of 12/31/21 is \$5,000 and they have another \$10,000 in a passbook savings account at their credit union. They also have a certificate of deposit at Bank of America of \$2,000.

In 2018, the couple bought a new car for \$25,000 and the current estimated value per Kellyâ€™s Bluebook of Used Cars is only \$12,000. Furniture is estimated at \$10,000 and Maryâ€™s engagement ring was recently valued by a jewelry shop at \$4,000.

Their investment portfolio (they own some shares of stock in a few corporations) cost \$3,000 and their market value as of the close of the stock market on December 31, 2021 was \$6,000. Their life insurance policy has a death benefit of \$500,000 (if either one of them dies, the survivor will receive \$500,000) and a cash surrender value of \$4,000 which they could cash-in if they needed to or could borrow against it.

Between their employers 401(k) plan and their IRAs, the couple have a market value of \$35,000. They recently used their credit cards for a vacation and holiday gifts and have an outstanding balance of \$3,000.

John recently did some consulting work on â€œthe sideâ€ and is owed \$3,000. But even though he completed the consulting work, he believes he will not collect the \$3,000 (accounts receivable) until sometime in February. Be sure to consider that amount for the September 1, 2020 balance sheet but also the budget.

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