A Personal Statement of Financial Condition Dated December 31,20X8,is to Be

question 43

Essay

A personal statement of financial condition dated December 31,20X8,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 31,20X8.
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 20X8 earnings amount to $15,000.Taxes withheld in 20X8 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 31,20X8.Assume any gain on subsequent sale of the residence will not be tax-exempt.
Problem 67 (continued):

Recognize the significance of introspection and its role in the initial study of psychology.

Appreciate the intellectual and disciplinary origins of psychology.

Understand the establishment of psychology as an independent discipline.

Acknowledge the role of the American Psychological Association in psychology.

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Definitions:

Standard Deviation

A statistical measurement that depicts the variation or dispersion of a set of values, commonly used in finance to measure the volatility or risk of an investment.

Defined Contribution Plan

A type of retirement savings plan where the amount contributed to the plan is defined, but the future benefit amounts are not guaranteed.

Risk-free Return

The return on an investment with no risk of financial loss, typically associated with government bonds.

Standard Deviation

A statistical measurement that reflects the amount of variance or dispersion of a set of values. A low standard deviation means that the values tend to be close to the mean, while a high standard deviation means that the values are spread out over a wider range.