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Step Forward - NorQuest Col X Microsoft Word - Case 1 Brac X G Closing entries are made to t X Q ACCT 5 & 6 Flashcards | Quiz x C Search Textbook Solutions | ( X Sign Up - Course Hero X + X - > C a myclass.norquest.ca/pluginfile.php/1921247/mod_resource/content/1/Case%201%20Brad%20McDonald.pdf g Microsoft Word - Case 1 Brad Mcdonald.docx 1/1 Case I:Brad MCDonald Your childhood friend Brad MacDonald has asked you to help him gain control of his personal finances. Single and 30 years old, Brad is employed as a salesperson for a technology company. His annual salary is $54,000. After payroll deductions for El and CPP contributions, and income taxes, his monthly disposable income is $33,80. Brad has recently moved from his comfortable two-bedroom apartment with rent of $1,200 per month to a condo with rent of $1,600 per month. The condo is in a plush property owner's association with two golf courses, a lake, and an activity centre. You review his other monthly expenses and find the following: Tenant's insurance $ 20 Car payment (balance on car loan $10 000; market value of car $11 000) $400 Utilities (gas, electric, cable) $100 Smartphone $210 Food (consumed at home) $200 Clothes $100 Car expenses (gas, insurance, maintenance) $250 Entertainment (dining out, golf, weekend trips) $350 Credit card payment $250 Brad is surprised by how much money he spends on clothes and entertainment. He uses his credit card for these purchases (the balance is $8,000 and climbing) and has little trouble making the required minimum monthly payment. He would, however, like to see the balance go down and would eventually like to pay his credit card off completely. Brad's other goal is to save $4,000 a year so that he can retire 20 years from now. He would like to start saving in five years, as he does not think the delay will affect the final amount of retirement savings he will accumulate. + Brad currently has about $4,000 in his chequing account and $200 in his savings account. He has furniture valued at $1,500 and owns 1000 shares of an internet stock, currently valued at $1,300, which he believes has the potential to make him rich. w= GuidetoHR-Book..docx ~ GuidetoHR-Book..docx Show all X Type here to search O P ~ E ( 0 4) ENG 11:03 AM 2020-02-02Step Forward - NorQuest Col X Brad MacDonald Worksheet X G Closing entries are made to t X Q ACCT 5 & 6 Flashcards | Quiz x C Search Textbook Solutions | ( X Sign Up - Course Hero X + X - -> C a myclass.norquest.ca/pluginfile.php/1921248/mod_resource/content/1/BradMacDonald_Part1%20work%20sheet.pdf g Brad MacDonald Worksheet 1/7 C: NAME DATE Part 1: Brad MacDonald-A Continuing Case CASE QUESTIONS 1. What is Brad's financial planning life stage? With respect to his current financial position, what are some of the things that Brad should be considering? 2. What are Brad's major goals? Evaluate his goals with respect to how specific, measurable, and realistic they are. Are these short-term or long-term goals? What additional goals could you recommend to Brad for the short and long term? + w= GuidetoHR-Book..docx ~ GuidetoHR-Book..docx ~ Show all X Type here to search O m X P W ~ GO4) ENG 11:03 AM 2020-02-02Step Forward - NorQuest Col X Brad MacDonald Worksheet X G Closing entries are made to t X Q ACCT 5 & 6 Flashcards | Quiz X C Search Textbook Solutions | ( X Sign Up - Course Hero X + X -> C ^ myclass.norquest.ca/pluginfile.php/1921248/mod_resource/content/1/BradMacDonald_Part1%20work%20sheet.pdf g Brad MacDonald Worksheet 1/7 3. Prepare personal financial statements for Brad, including a personal cash flow statement and personal balance sheet. Based on these statements, make specific recommendations to Brad about what he needs to do to achieve his goals of paying off his credit card balance and saving for retirement. Copyright @ 2019 Pearson Canada Inc. Brad MacDonald Worksheet: Part 1 NAME DATE Personal Cash Flow Statement Income This Month Expenses w= GuidetoHR-Book..docx ~ GuidetoHR-Book..docx ~ Show all X Type here to search O X P W ~ E ( 0 4) ENG 11:03 AM 2020-02-02Step Forward - NorQuest Col x Brad MacDonald Worksheet X G Closing entries are made to t X Q ACCT 5 & 6 Flashcards | Quiz x C Search Textbook Solutions | ( X Sign Up - Course Hero X + X - -> C a myclass.norquest.ca/pluginfile.php/1921248/mod_resource/content/1/BradMacDonald_Part1%20work%20sheet.pdf g Brad MacDonald Worksheet 217 Income This Month Expenses Total Expenses Net Cash Flows Personal Balance Sheet Assets Liquid Assets Cash Chequing account Savings account w= GuidetoHR-Book..docx ~ GuidetoHR-Book..docx Show all X Type here to search O m X P W ~ E ( 0 4) ENG 11:04 AM 2020-02-02Step Forward - NorQuest Col X Brad MacDonald Worksheet X G Closing entries are made to t X Q ACCT 5 & 6 Flashcards | Quiz x C Search Textbook Solutions | ( X Sign Up - Course Hero X + X -> C a myclass.norquest.ca/pluginfile.php/1921248/mod_resource/content/1/BradMacDonald_Part1%20work%20sheet.pdf Personal Balance Sheet Assets Liquid Assets Cash Chequing account Savings account Other liquid assets Total liquid assets 2 Brad MacDonald Worksheet: Part 1 Copyright @ 2019 Pearson Canada Inc. NAME DATE Household Assets Home Car Furniture Other household assets w= GuidetoHR-Book..docx ~ GuidetoHR-Book..docx Show all X Type here to search O X P W ~ GO4) ENG 11:04 AM 2020-02-02Step Forward - NorQuest Col X Brad MacDonald Worksheet X G Closing entries are made to t X Q ACCT 5 & 6 Flashcards | Quiz X C Search Textbook Solutions | ( X Sign Up - Course Hero X + X -> C A myclass.norquest.ca/pluginfile.php/1921248/mod_resource/content/1/BradMacDonald_Part1%20work%20sheet.pdf g Brad MacDonald Worksheet 3/7 Home Car Furniture Other household assets Total household assets Investment Assets Stocks Bonds Mutual funds Other investments Total investment assets Total Assets Liabilities and Net Worth Current Liabilities Loans Credit card balance Other current liabilities Total current liabilities Long-term Liabilities Mortgage Car loan Other long-term liabilities Total long-term liabilities Total Liabilities Net Worth w= GuidetoHR-Book..docx ~ GuidetoHR-Book..docx Show all X Type here to search O m X P W ~ E ( 0 4) ENG 11:04 AM 2020-02-02Step Forward - NorQuest Col x Brad MacDonald Worksheet X G Closing entries are made to t X Q ACCT 5 & 6 Flashcards | Quiz X C Search Textbook Solutions | ( X Sign Up - Course Hero X + X C A myclass.norquest.ca/pluginfile.php/1921248/mod_resource/content/1/BradMacDonald_Part1%20work%20sheet.pdf Brad MacDonald Worksheet 5/7 4. Calculate Brad's current ratio, liquidity ratio, debt-to-assets ratio, and savings ratio. What do these ratios tell you about how Brad is managing his financial resources? 5. Consider Brad's goal to retire in 20 years by saving $4000 per year starting five years from now. a. Based on your analysis of Brad's cash flow and your recommendations, is saving $4000 per year a realistic goal? If not, what other goal would you advise? w= GuidetoHR-Book..docx ~ GuidetoHR-Book..docx Show all X Type here to search O X P W ~ E ( 0 4) ENG 11:04 AM 2020-02-02Step Forward - NorQuest Col X Brad MacDonald Worksheet X G Closing entries are made to t X Q ACCT 5 & 6 Flashcards | Quiz x C Search Textbook Solutions | ( X Sign Up - Course Hero X + X - -> C a myclass.norquest.ca/pluginfile.php/1921248/mod_resource/content/1/BradMacDonald_Part1%20work%20sheet.pdf g Brad MacDonald Worksheet 6/7 C: assumption (or piece of information) must he make (or have)? Copyright @ 2019 Pearson Canada Inc. Brad MacDonald Worksheet: Part 1 5 NAME DATE c. Assuming that Brad invests the $4000 per year for 20 years, starting five years from now, and achieves an annual return of 9 percent, compounded monthly, how much will he accumulate in 25 years? d. Compare the alternative of investing $4000 every year for 25 years beginning today, with Brad's plan to invest $4000 every year for 20 years beginning five years from now. How much will Brad have to save each year to accumulate the same amount that he would have had in 25 years if he started saving now instead of five years from now? (Again, assume a 9 percent annual return, compounded monthly.) + 6. Develop three or four suggestions that could help Brad reduce his income tax exposure. Suggestions to Reduce Taxes Pros Cons w= GuidetoHR-Book..docx ~ GuidetoHR-Book..docx ~ Show all X Type here to search O X P W ~ @ ( 0 4) ENG 11:04 AM 2020-02-02Step Forward - NorQuest Col X Brad MacDonald Worksheet X G Closing entries are made to t X Q ACCT 5 & 6 Flashcards | Quiz x C Search Textbook Solutions | ( X Sign Up - Course Hero X + X - -> C a myclass.norquest.ca/pluginfile.php/1921248/mod_resource/content/1/BradMacDonald_Part1%20work%20sheet.pdf g Brad MacDonald Worksheet 6/7 C: 6. Develop three or four suggestions that could help Brad reduce his income tax exposure. Suggestions to Reduce Taxes Pros Cons + 6 Brad MacDonald Worksheet: Part 1 Copyright @ 2019 Pearson Canada Inc. w= GuidetoHR-Book..docx ~ GuidetoHR-Book..docx Show all X Type here to search O m X P w ~ E ( 0 4) ENG 11:04 AM 2020-02-02