Case Study 3 Steve (Slick) Willy, 45, just got out of jail. As a reformed citizen on parole, Slick decides to go into business for himself. He starts a collections company to help companies collect debts. The terms of his parole stipulate that he pay restitution payments to the federal government of S400 a month, or 10 percent of his income, whichever is greater. As his parole officer, you notice that after a year out of jail, Slick makes some interesting purchases. First, he buys a new Jaguar which he drives to parole meetings Second, he moves into an expensive neighborhood on the north side of town and takes a cruise to Jamaica with his 19-year-old girlfriend. Yet, he has never been late making his $400 monthly payments to the federal government. After obtaining a subpoena for his bank records, you notice that he has only $1,000 in his account. About this time, you receive a call from a man who is making payments to Slick's collection com- pany. He states that Slick is threatening to break his legs and hurt his family if he doesn't pay Slick's com pany. The man says Slick demands the checks be made out to a woman, not a company This complaint convinces you to investigate Mr. Willy and his girlfriend. A search of UCC filings in the county shows that Slick's girlfriend owns three cars costing a total of $90,000, a $250,000 house, and a company called Tak'It From You. You check her bank account and see that more than S50,000 is moving through the account each month. You decide to dig through Slick and his girlfriend's trash a few times each month. In these searches, you find evi- dence that supports the following three car payments totaling $1,000 per month; a $1,500 monthly mortgage payment; a credit card balance of S6,000, with $100 monthly payments; a balance of S12,000 owed to Home Shopping Network, with S500 monthly payments, $400 food payments during the past two weeks; and a $3,500 payment to Jamaican Cruise Lines. After searching the girlfriend's trash, you talk to her neighbors, friends, and co-workers and determine that Nhe and Slick spend between $1,500 and $2,000 a month on miscellancous items and trips. One neighbor tells you that Slick just gave his girlfriend a diamond ring that cost $3,000. Slick's girlfriend works as a waitress, at a small restaurant and makes only $15,000 a year. (Note: Assume that both Slick and his girlfriend's net worth last year were zero.) Question Use this information to prepare a net worth analysis of Slick's girlfriert (Ignore interest in your calculations.)