A Personal Statement of Financial Condition Dated December 31, 2008

question 30

Essay

A personal statement of financial condition dated December 31, 2008, is to be prepared for Wilhelm Holz. He provides the following information for your use in preparing the statements. All amounts are as of December 31, 2008.
1) Cash on hand and in bank is $4,000.
2) Investments costing $30,000 have a market value of $78,000.
3) His personal residence cost $150,000 ten years ago, and is currently worth $320,000.
4) The payoff balance of his home mortgage is $80,000.
5) The fair value of his 401(k) retirement account is $700,000. All withdrawals from the account will be fully taxable.
6) Amounts due on credit card debt total $5,000.
7) Estimated income taxes on his calendar 2008 earnings amount to $15,000. Taxes withheld in 2008 were $14,000.
8) Assume an income tax rate of 30 percent.
Required:
Prepare a statement of financial condition for Mr. Holz as of December 31, 2008. Assume any gain on subsequent sale of the residence will not be tax-exempt.

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Definitions:

Greater Population

Refers to the larger portion or majority of individuals within a specified group or area.

Informed Consent

A research participant’s agreement to take part in the study, based on full information about what the experiment will involve.

Relevant Risks

The potential threats or uncertainties that are directly related to specific decisions or activities, impacting their success or outcome.

Deception

The act of misleading or deceiving someone by presenting false information or concealing the truth.