Question: Are your total medical expenses deductible?

> Dave and Sharon Sampson are 30 years old and have two children, who are five and six years old. Since marrying seven years ago, the Sampsons have relied on Dave’s salary, which is currently $48,000 per year. They have not be

> List some information available on the Internet that might be useful for financial planning. Describe one way you might use some of this information for financial planning purposes.

> Daniel has a marginal tax rate of 25%. He suddenly realizes that he neglected to include a $1,000 tax deduction. How will this oversight affect his taxes?

> Why might you need to revise your financial plan?

> The IRS tax code allows for the deduction of expenses incurred in traveling to a job interview. Sean, Erica, and their two children have used this deduction to fund their vacations for the last eight years. Each year, several months prior to their vacati

> Once your financial plan has been implemented, what is the next step? Why is it important?

> Jauna made $178,400 in salary during 2015. How much were her FICA withholdings for that year?

> Jill has decided to save 50% of her income for retirement. Her father told her she needed to set a different goal. Why do you think he gave her this advice?

> Dawn’s adjusted gross income is $16,700. Dawn has $1,800 in unreimbursed medical expenses. How much can Dawn claim as an itemized deduction?

> Name some factors that might affect your current financial position.

> Brian makes $27,000 per year. How much can he expect to contribute to FICA taxes in 2015? How much will his employer contribute?

> Julia (from problem 1) is considering trading in her car for a new one. Her new car payment will be $325 per month, and her insurance cost will increase by $60 per month. Julia determines that her other car-related expenses (gas, oil) will stay about the

> Juan would like to give his newly born grandson a gift of $10,000 on his 18th birthday. Juan can earn 7% annual interest on a certificate of deposit. How much must he deposit now to achieve his goal?

> Emma’s adjusted gross income is $24,200. She has $1,800 in unreimbursed medical expenses. How much in medical expenses can Emma claim as an itemized deduction?

> How do your financial goals fit into your financial plan? Why should goals be realistic? What are three time frames for goals? Give an example of a goal for each time frame.

> Tracy is single and had an adjusted gross income of $37,000 in 2015. Tracy also has the following items: Unreimbursed medical expenses…………$3,000 State income tax…………………………………..1,850 Interest expense (first mortgage)………….3,040 Interest expense (second m

> What are the six steps in developing a financial plan?

> Jason and Mia are in their early 20s and have been married for three years. They are eager to purchase their first house, but they do not have sufficient money for a down payment. Mia’s Uncle Chris has agreed to loan them the money to purchase a small ho

> How does each element of financial planning affect your cash flows?

> Based on the information in Problems 9 and 10, what is Ryan and Nicole’s liquidity ratio? What is their debt-to-asset ratio? Comment on each ratio. Data from Problem 9: Ryan and Nicole have the following assets:

> What are the three elements of planning to protect your assets? Define each element.

> Jasmine has been saving for the past five years for a European vacation. Her vacation account currently has $5,000, and she is ready to book her trip. If she takes the vacation, what impact will it have on her net worth? Should she take the trip?

> Amy and Vince want to save $7,000 so that they can take a trip to Europe in four years. How much must they save each month to have the money they need if they can get 8% per year, compounded monthly, on their savings?

> How is your net worth calculated? Why is it important?

> Cheryl wants to have $2,000 in spending money to take on a trip to Disney World in three years. How much must she deposit now in a savings account that pays 5% per year to have the money she needs in three years?

> The purpose of this exercise is to introduce you to one of the online tools that are available to help with budgeting and financial planning. Go to http://www.mint.com, and review the information available on this Web site. Don’t sign up yet, although yo

> Ryan and Nicole (from Problem 9) have the following liabilities: / What are their current liabilities? What are their long-term liabilities? What is their net worth?

> What factors influence income? Why is an accurate estimate of expenses important in budget planning? How do tax laws affect the budgeting process?

> Ryan and Nicole have the following assets: Fair Market Value Home……………………..$85,000 Cars…………………….……22,000 Furniture…………………..14,000 Stocks……………………….10,000 Savings account………..…5,000 Checking account…….….

> Dave and Sharon Sampson want to determine their taxes for the current year. Dave will earn $48,000 this year, while Sharon’s earnings from her part-time job will be $12,000. Neither Dave nor Sharon contributes to a retirement plan at th

> Dave and Sharon Sampson want to determine their taxes for the current year. Dave will earn $48,000 this year, while Sharon’s earnings from her part-time job will be $12,000. Neither Dave nor Sharon contributes to a retirement plan at this time. Recall th

> List some common types of tax credits

> What is the difference between a tax deduction and a tax credit? Which is more valuable?

> Julia brings home $1,600 per month after taxes. Julia’s rent is $350 per month, her utilities are $100 per month, and her car payment is $250 per month. Julia is currently paying $200 per month to her orthodontist for her braces. If Julia’s groceries cos

> What is a marginal tax bracket? Why is it important?

> How is taxable income calculated?

> What two methods can be used to calculate future values?

> What is a standard deduction? What is the standard deduction based on?

> How are FICA taxes for self-employed individuals handled?

> What is an earned income credit? Explain why this credit is sometimes called a negative income tax.

> What is liquidity? What two factors are considered in managing liquidity? How are they used?

> How are same-sex couples treated for tax purposes?

> In the past, the federal government has implemented tax relief initiatives for various reasons. List some recent examples of targeted tax relief.

> How did the Affordable Care Act of 2010 affect tax filing?

> Anna has just received a gift of $500 for her graduation, which increased her net worth by $500. If she uses the money to purchase a tablet computer, how will her net worth be affected? If she invests the $500 at 4% interest per year, what will it be wor

> What is the purpose of income tax? Who administers the federal tax system?

> Which form must be filed with the IRS for itemized deductions?

> Do investors in a low tax bracket or a high tax bracket benefit to a greater degree from the long-term capital gains tax? Explain.

> Define compounding. How is it used in financial planning?

> Distinguish between interest income and dividend income. Does their treatment differ for tax purposes?

> Which of the following would be included in gross income? Salary Prizes Business income Tips Veteran’s benefits Welfare benefits Alimony Dividend income Child support Interest income

> What are capital gains? When is a capital gain considered short term? When is it considered long term? Why is this distinction important?

> Jarrod (from Problem 7) has an old TV worth about $100. Jarrod’s other assets total about $150. What is Jarrod’s debt-to-asset ratio? What does this indicate about Jarrod’s financial position? Data from Problem 7: Jarrod is a college student. All of Ja

> What is gross income? List some types of income that are included in gross income. What are some types of payments that you might receive that would not be included in gross income?

> At the beginning of the year, Arianne had a net worth of $5,000. During the year she set aside $100 per month from her paycheck for savings and borrowed $500 from her cousin that she must pay back in January of next year. What was her net worth at the en

> Jordan sold a stock that he held for 11 months at a capital gain of $10,000. He is in the 25% marginal tax bracket. What taxes will he pay on this gain?

> How would you modify the FVA equation to determine how much you would need to save each month to have a specific amount at a specific time in the future?

> What formula is used to determine the present value of an annuity? What does the present value of an annuity indicate?

> In questions a through d, indicate whether you would use the table for determining the future value of a single sum (FVIF), the present value of a single sum (PVIF), the future value of an annuity (FVIFA), or the present value of an annuity (PVIFA). a

> What is discounting?

> What is the formula for determining the future value of a single sum when using the future value interest factor table? What information must be known to find the correct future value interest factor?

> List one reason why the time value of money is an important concept.

> Why is it important to track your spending before creating a budget?

> Alys makes $450 per week. How much will be withheld from her weekly check for Social Security tax? Medicare tax? Total FICA taxes?

> The July accounting records of Star Systems, Inc. include these accounts: Requirement 1. Compute Star System, Inc.’s net cash provided by operating activities during July. Use the indirect method. Cash Accounts Receivable Jul 1

> The financial statements of Timberview, Inc., reported the following: Prepare the stockholders’ equity section of Timberview, Inc.’s balance sheet. Net income has already been closed to Retained Earnings. $ 172,0

> The accounting records of Perry & Associates, Inc., reveal: Requirements 1. Compute cash flows from operating activities by the indirect method. Use the format of the operating activities section shown in Exhibit 11-3. 2. Evaluate the operating

> According to the Real World Accounting Video, there are two types of stock a company can use to finance its assets and operations. The two types of stock are _______________. a. common stock and uncommon stock b. preferred stock and designated stock c.

> Use the Inland Medical Supply, Inc., data in S11-10 to compute the following amounts for 2016: 1. Borrowing or payment of long-term notes payable, assuming Inland had only one long-term note payable transaction during the year 2. Issuance of common stock

> According to the Real World Accounting Video, Fishs Eddy uses a(n) ____________ to help finance its operations when there is a temporary need for cash. a. stock sale b. bond c. accounts payable d. line of credit

> After being in business for several years and issuing its common stock to the public, Liquidation World, Inc., completed the following treasury stock transactions: a. Purchased 2,500 shares of the company’s $2 par common stock as treasury stock, paying

> In the Real World Accounting Video, Howard Greenstone talks about the challenges of operating a business. According to Greenstone, what is the objective of a business? a. Create sales b. Create jobs c. Create value d. Create preferred dividends

> Use the Inland Medical Supply, Inc., data in S11-10 to compute the amount of fixed assets acquired by Inland Medical Supply, Inc., assuming Inland sold no fixed assets in 2016. Inland Medical Supply, Inc. Income Statement Year Ended December 31, 2

> According to the Real World Accounting Video, a ____________ is a business that sells products to other businesses for resale. a. retail business b. wholesale business c. mixed business d. flow-through

> Let’s look at Dick’s Sporting Goods (Dick’s) some more. Think about Dick’s. How did Dick’s get the money in order to fund its operations? Return to Dick’s Annual Report and look at Dick’s financial statements. Now answer the following questions: 1. Look

> Suppose Nolan, Inc., has common stock, $8 par, 500,000 shares authorized, 120,000 shares issued and outstanding. The company also has Paid-in Capital in Excess of Par, common of $225,000 and Retained Earnings of $298,000. The company decided to split its

> When considering whether to invest in a company, why would an investor want to examine the company’s return on equity?

> Inland Medical Supply, Inc., reported the following financial statements for 2016: Use the information in Inland Medical Supply, Inc.’s financial statements to compute the following: 1. Collections from customers 2. Payments for inv

> Elliot Enterprises had operating expenses of $51,000. At the beginning of the year, Elliot Enterprises owed $10,000 on accrued liabilities. At year-end, accrued liabilities were $17,000. How much cash did Elliot Enterprises pay for operating expenses? a

> A company’s cash conversion cycle increased from 55 days in year 1 to 68 days in year 3. What are the implications of this increase? What do you think happens to the cash conversion cycles of companies during a recession?

> Compare and contrast the accounting for cash dividends and stock dividends. In the space provided, insert either “Cash dividends,” “Stock dividends,” or “Both” to complete each of the following statements: 1. _________ increase paid-in capital by the sa

> Assume that TJ’s Wholesale pays $9 per share to purchase 1,100 of its $1 par common stock as treasury stock. What is the effect of purchasing the treasury stock? a. Decreases total stockholders’ equity by $1,100 b. Decreases total stockholders’ equity b

> What could you reasonably conclude if a company reports more shares of stock issued than outstanding?

> Juarez Equipment, Inc., assembled the following data related to its cash transactions for the year ended June 30, 2016: Prepare Juarez Equipment’s statement of cash flows for the year ended June 30, 2016, using the direct method. Juar

> SRS Systems, Inc., had accounts receivable of $27,000 at the beginning of the year and $56,000 at year-end. Revenue for the year totaled $106,000. How much cash did SRS Systems collect from customers? a. $189,000 b. $162,000 c. $77,000 d. $133,000

> This exercise continues our accounting for Sensations Salon, Inc., from Chapter 9. In this exercise, we will account for the declaration and issuance of a cash dividend by Sensations Salon, Inc. On November 5, 2016, Sensations Salon, Inc., declared a $5,

> How would the sale of treasury stock that was acquired three years ago appear in the statement of cash flows (if at all)?

> Oceanview Realty, Inc., has 110,000 shares of $2.00 par common stock outstanding. Oceanview Realty, Inc., declares and distributes a 10 percent stock dividend when the market value of its stock is $8 per share. 1. Journalize Oceanview Realty’s declarati

> What happens with a 2-for-1 stock split? a. Decreases the par value of the stock b. Increases the number of shares of stock issued c. Both a and b d. None of the above

> What kind of account is Treasury Stock? What is its normal balance? Where would it be reported on the financial statements?

> Nemo’s Spas began 2016 with cash of $32,000. During the year, Nemo’s Spas earned service revenue of $610,000 and collected $572,000 from customers. Expenses for the year totaled $449,000, of which Nemo’s Spas paid $417,000 in cash to suppliers and employ

> Which item appears on a statement of cash flows prepared by the indirect method? a. Payment of income tax b. Payment to suppliers c. Collections from customers d. Net income

> Why would a decrease in accounts payable be shown as a decrease in cash when using the indirect method of calculating the cash flows from operating activities?

> Zepher, Inc., prepared the following stockholders’ equity section as of December 31, 2016. Answer the following questions about Zepher, Inc.’s dividends: 1. How much in dividends must Zepher, Inc., declare each year

> What does a 10 percent stock dividend do? a. Increases Common Stock b. Has no effect on total equity c. Decreases Retained Earnings d. All of the above

> What are some of the reasons for issuing a stock dividend?

> Your boss has just asked you to write a short note to one of his clients that had expressed some concerns about the difference between liabilities that are of an unknown amount versus contingent liabilities. The client is in the midst of a lawsuit with a

> Trident Equipment’s accountants assembled the following data for the year ended April 30, 2016. Prepare Trident Equipment’s statement of cash flows for the year ended April 30, 2016, using the indirect method. The ca

> Minot Corporation borrowed $14,000, issued common stock of $11,000, and paid dividends of $16,000. What was Minot Corporation’s net cash provided or used by financing activities? a. $(5,000) b. $16,000 c. $9,000 d. $41,000

> Assuming the indirect method is used, how does an increase in accounts receivable during the year affect the statement of cash flows (if at all)? Why?