Catherine (aged 42) and Johnson (aged 45) have been married for 12 years. Johnson is a...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Catherine (aged 42) and Johnson (aged 45) have been married for 12 years. Johnson is a project manager of an event company at a monthly salary of $55,000 with an additional one-month salary of year-end bonuses. Catherine is a kindergarten teacher and earns $40,000 per month. Catherine only made mandatory contributions to her MPF schemes but Johnson, in addition to the mandatory contributions, also made voluntary contributions of $3500 per month to the Qualifying Tax Deductible MPF schemes. They have a son, 11 years old, studying in a local primary school. They recently live in a self-occupied apartment valued at $6,000,000. They still have the mortgage payment amounted $2,500,000. The current monthly mortgage payment is $19,000 paid by Johnson. The family's other monthly expenses total at $21,000. Besides the aforementioned expenses, Johnson gives his parents (aged 75 and 68) $5,000 allowance monthly and his parents are not living with them. Catherine's father passed away few years ago. Her 65-year-old mother is disabled, lives in private residential care home for the elderly which costs $12,000 per month paid by Catherine. Johnson's employer provides good employee benefits, including group life insurance equal to three times Johnson's annual salary, group disability insurance and adequate family medical insurance. The beneficiary of Johnson's group life insurance is Catherine. Catherine's employer just provides basic medical insurance, but she has purchased a whole life insurance and the beneficiary is Johnson. The unsured amount is $2,000,000. Johnson and Catherine current have $600,000 in their bank account. Johnson also holds I-bonds and blue-chips stocks which valued around $100,000. Would you suggest Johnson and Catherine buy an investment-linked insurance policy? Explain why. (10 marks) Catherine (aged 42) and Johnson (aged 45) have been married for 12 years. Johnson is a project manager of an event company at a monthly salary of $55,000 with an additional one-month salary of year-end bonuses. Catherine is a kindergarten teacher and earns $40,000 per month. Catherine only made mandatory contributions to her MPF schemes but Johnson, in addition to the mandatory contributions, also made voluntary contributions of $3500 per month to the Qualifying Tax Deductible MPF schemes. They have a son, 11 years old, studying in a local primary school. They recently live in a self-occupied apartment valued at $6,000,000. They still have the mortgage payment amounted $2,500,000. The current monthly mortgage payment is $19,000 paid by Johnson. The family's other monthly expenses total at $21,000. Besides the aforementioned expenses, Johnson gives his parents (aged 75 and 68) $5,000 allowance monthly and his parents are not living with them. Catherine's father passed away few years ago. Her 65-year-old mother is disabled, lives in private residential care home for the elderly which costs $12,000 per month paid by Catherine. Johnson's employer provides good employee benefits, including group life insurance equal to three times Johnson's annual salary, group disability insurance and adequate family medical insurance. The beneficiary of Johnson's group life insurance is Catherine. Catherine's employer just provides basic medical insurance, but she has purchased a whole life insurance and the beneficiary is Johnson. The unsured amount is $2,000,000. Johnson and Catherine current have $600,000 in their bank account. Johnson also holds I-bonds and blue-chips stocks which valued around $100,000. Would you suggest Johnson and Catherine buy an investment-linked insurance policy? Explain why. (10 marks)
Expert Answer:
Answer rating: 100% (QA)
I would suggest Johnson and Catherine buy an Investmentlinke... View the full answer
Related Book For
Income Tax Fundamentals 2014
ISBN: 9781285424545
32nd edition
Authors: Gerald E. Whittenburg, Martha Altus-Buller, Steven Gill
Posted Date:
Students also viewed these accounting questions
-
Gerry (age 56) and Elaine (age 54) have been married for 12 years and file a joint tax return. The couple lives in an apartment in downtown Manhattan. Gerrys father, Mortey, recently retired from Del...
-
John and Shay have been married for 12 years. John had a net worth of $20,000,000 when he died in 2018. Which of the following scenarios would incur the lowest overall (at Johns death and Shays...
-
Mason and his wife Madison have been married for five years. Jaxon, who is 18 years old and unrelated to Mason and Madison, has been living with Mason and Madison for the last two years. In May of...
-
Burger Prince buys top-grade ground beef for $1.00 per pound. A large sign over the entrance guarantees that the meat is fresh daily. Any leftover meat is sold to the local high school cafeteria for...
-
Which of the following types of businesses do you expect to show a high degree of seasonality in quarterly earnings? Explain why.
-
Identify some advantages of technology for accounting.
-
For situational leadership theory, ____________. (a) management is substituted for leadership (b) position power is very important (c) there is considerable empirical support (d) maturity or...
-
Selected comparative financial statements of Korbin Company follow. Required 1. Compute each year's current ratio. (Round ratio amounts to one decimal.) 2. Express the income statement data in...
-
Maximize +y 3x+7y56 5+2y45 Subject to I 0 0 y Maximum is at
-
Question 2 (26 points): Suppose an individual's utility function for two goods X and Y is given by U(X,Y) = X(1/2)y(1/2). Denote the price of good X by P., price of good Y by Py, and the income of...
-
Solve the equation. (x? + 6x?y*) dx + e*y dy = 0 An implicit solution in the form F(x,y) = C is = C, where C is an arbitrary constant. %3D (Type an expression using x and y as the variables.)
-
LALA Corp has just started its operations in 2020. After 6 months, the company has the following data: Cost of goods sold is 540,000; 30% of Manufacturing cost were distributed to Direct labor cost....
-
wwwwww 4. You run a sporting good store in Olean, NY. Your customers are either Townies (residents of the town) or Students (of St. Bonaventure University). Some characteristics of those two segments...
-
In 2022, Brady purchases a new electric vehicle for his personal use. The critical minerals in the battery are domestically sourced and the battery components are foreign produced. His AGI is...
-
Flying High Pies manufactures gourmet pies for speciality restaurants. The vegetarian filling of the pie is made by the mixing division and is then transferred to the baking division. At the baking...
-
6. You are given a large bin of coins. You have prior belief that 80% are fair coins, but 20% come up heads 2/3 of the time. If you are given a coin at random and flip it 10 times, how many tails...
-
Sharman Athletic Gear Incorporated (SAG) is considering a special order for 15,500 baseball caps with the logo of East Texas University (ETU) to be purchased by the ETU alumni association. The ETU...
-
Danielle has an insurance policy with a premium of $75 per month. In September she is in an accident and receives a bill worth $2990 for the repair of her own property. Her deductible is $250 and her...
-
Larry and Lisa Williams, both 33 years old, have been married for 9 years. They live at 638 Arctic Way, Fairbanks, AK 99701. Lisa's Social Security number is 445-81-1423 and Larry's is 798-09-8526....
-
Patty Bayan is a single taxpayer living at 543 Space Drive, Houston, TX 77099. Her Social Security number is 466-33-1234. For 2013, Patty has no dependents, and her W-2 from her job at a local...
-
William sold Section 1245 property for $25,000 in 2013. The property cost $35,000 when it was purchased 5 years ago. The depreciation claimed on the property was $16,000. a. Calculate the adjusted...
-
Define: convertible bond, bond with equity warrants, preference share, investment certificate and bond redeemable in shares.
-
The bond market yield is 7%. A company issues a bond with equity warrants at a gross yield to maturity of 3% assuming the warrants are not exercised. What is the cost of this product? What is the...
-
Is a convertible bond more costly to the issuing company than a bond with equity warrants?
Study smarter with the SolutionInn App