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Case Link Question (10) Directions: Click the Case Link above and use the information provided in the Melissa Carter case to answer this question: Which of the following adjustments must be made to determine the dollar amount of Melissa Carter's total liquid assets? 1. Eliminate $65,000 cash on hand 2. . Eliminate $18,000 note receivable . 3. Eliminate $750,000 listed securities 4. Eliminate $3,600,000 unlisted securities 1 and 2 O 1, 2, and 4 O 2, 3, and 4 O2 and 4 Melissa Carter Personal Financial Statement PERSONAL FINANCIAL STATEMENT Borrower name: Melissa Carter Address: 1110 Jackson Ave. Co-borrower name: Address: AGA I(we) make the following statement of all my (our) assets and liabilities as of the 31st day of December 20Y3 and give other material information for the purpose of obtaining credit with you on notes and bills bearing my (our) signature, endorsement, or guarantee. I (we) hereby certify that this statement presents a true, complete, and correct statement of my (our) financial condition as of the date shown and does not omit any pertinent information. I (we) understand that alimony, child support, and separate maintenance need not be revealed, unless I (we) wish to have it considered as a basis for repaying the requested credit. I (we) understand that misrepresenting information on this (or the attached) statement is a criminal offense under federal law. Instructions: Complete all schedules on pages 2 and 3, then enter any additional information on this page. Complete all blanks; enter 0, no, or none if appropriate. ASSETS LIABILITIES & NET WORTH Short-term and demand notes payable to banks and Cash on hand and in banks (Sch. 1) S 65,000 others (Sch. 10) S 40,000 Government securities (quaranteed) $ Margin debt (Sch. 11) $ Listed securities (Sch. 2) S 750,000 Unpaid taxes and interest due this year $ Unlisted securities (Sch: 3) $ 3,600,000 Other current liabilities (list below) S Accounts and notes receivable (Sch. 4) $ 18,000 $ TOTAL LIQUID ASSETS 4,433,000 S Residential real estate (Sch. 5) 505,000 Residential real estate mortgages (Sch. 5) $ 172,130 Non-residential real estate (Sch. 6) $ 1,350,000 Non-residential real estate mortgages (Sch. 6) $ 860,655 Cash value of life insurance $ Auto loans (Sch. 7) S 8,200 Automobiles (Sch. 7) $ 24,000 Other loans and obligations (Sch. 12) $ Household furnishings & personal property $ 100,000 Credit cards (Sch. 13) $ 5,000 Other assets (Sch. 8 & 9) $ Other (list): Retirement accounts (401(k), Keogh, IRA, etc.) S 200,000 TOTAL LIABILITIES $ 1,085,985 TOTAL ASSETS $ 6,612,000 NET WORTH $ 5,526,015 ANNUAL INCOME ANNUAL EXPENSES Salary $ 400,000 Mortgage payments, residential RE (Sch. 5) S 31,476 Interest $ 1,250 Mortgage payments, non-residential RE (Sch. 6) S 70,752 Dividends $ 29,200 Other loan & credit card payments (Sch. 7, 10, 12, 13) $ 52,590 Residential real estate income (Sch. 5) Required partnership contributions $ Non-residential real estate income (Sch. 6) 120,000 Taxes: Income, real estate, etc. S 366,000 Other business income (Sch. 3 and 8) $ 335,000 Insurance premiums 5,200 Other recurring income (Sch. 9) $ Living expenses, etc. S 30,000 Non-recurring or variable income Alimony, child support, separate maintenance $ Commissions and bonuses $ Charitable contributions $ 10,000 Other: Capital gains, net of losses $ 73,000 Other contractual obligations (tuition, etc.) S Other: S Other (attach list) $ TOTAL $ 958,450 TOTAL $ 566,018 PERSONAL INFORMATION GENERAL INFORMATION Enter Yes or No Business or occupation: Are any assets pledged? List. Owner & President, Carter Distributors, Inc. Homes, commercial real estate, auto, jewelry Yes Partner or officer in other venture(s) (List): Are you defendant in any suits or legal action? No Caffeine Connections, Inc. Have you ever made a composition settlement? No Name(s) and age(s) of dependents Have you taken bankruptcy? If yes, when? No Katie (11), Cliff (8) Are any assets held in trust? CONTINGENT LIABILITIES Enter Yes or No Circumstances and potential liability As endorser, co-maker, or guarantor? Yes Guarantor for various loans to Carter Distributors, Inc. Pending legal claims against you? No inn $ Yes Co-borrower's signature Borrower's signature Melissa Carter 1/12/14 Date Date Melissa Carter SUPPLEMENTARY SCHEDULES 1-6 (Attach separate sheets if necessary) Sch. 1, Assets: List cash on hand if significant, and all bank accounts Ownership Financial institution Type of account (Individual, Joint) Mid Town Bank Checking $32,000 1 MidTown Bank Money market $33,000 Interest income last year Balance Amount pledged To whom pledged $1,250 Sch. 2: Assets: Listed securities (other than guaranteed government securities) Face value (bonds) Description of security or Ownership Income received or # of shares managed by (Individual, Joint) last year Various Schwab brokerage account $29,200 Present market If pledged, amount value pledged and to whom $750,000 n/a Sch. 3, Assets: Unlisted securities, ownership interest in private corporations Face value (bonds) Percent of or # of shares Description of security ownership Current value 1,000 Carter Distributors, Inc. 100% $3,470,000 Non-salary income rec'd last year Basis for valuation Valued at 2 times sales for year just $335,000 ended Valued at 2 times sales for year just ended 400 Caffeine Connections, Inc. 40% $130,000 Sch. 4, Assets: Notes receivable Name of debtor and relationship to applicant Henry Carter, nephew Amount owing Age of debt $18,000 1 year Description of nature of debt Tuition loan Description of collateral held none When is payment expected? 3-5 years Annual income, net of expenses, before debt service Annualized payments Years to maturity Sch. 5, Assets and liabilities: Residential real estate and mortgages payable Description of property and Current market Balance of related ownership % value debt Lienholder Primary residence, 100% $350,000 $110,655 MidTown Bank Vacation home, 100% $155,000 $61,475 Mid Town Bank 27 $11,604 7 $19,872 Sch. 6, Assets and liabilities: Non-residential real estate and mortgages payable Description of property and Current market Balance of related ownership % value debt Lienholder Years to maturity Land and building leased to Carter Distributors, 100% $1,350,000 $860,655 Metrobank 12 Annualized payments Annual income, net of expenses, before debt service $70,752 $120,000 Melissa Carter SUPPLEMENTARY SCHEDULES 7-13 (Attach separate sheets if necessary) Sch. 7, Liabilities: Autos and auto loans vehicle (year, model, Current market Balance of related make) Original cost value debt 2041 Volvo C70 $30,000 $15,000 $8,200 20Y0 Ford Explorer $43,000 99,000 SO Annualized payments Lienholder $7,590 First Credit Years to maturity 1.3 Sch. 8, Assets and Income: Other business income (partnership distributions, capital withdrawals, etc.; exclude corporations) Business name and ownership Amount received Future annual percentage Value of your share income Type of income Shown in tax return? Form or Schedule: last year Sch. 9, Assets and Income: Other significant assets and recurring income (trust income, annuities, pensions, etc.) Other asset or Current market Income received Future annual source of income value last year income Type of income Shown in tax return? Form or Schedule: Sch. 10, Liabilities: Short-term notes payable to banks and others Name of lender Outstanding Maturity date Collateral Tiffany & Co. $40,000 12/31/Y4 Jewelry Purpose, comments Sch. 11, Liabilities: Margin debt Name of lender Original amount Present balance Rate Payment terms Maturity Collateral Sch. 12, Liabilities: Other loans and obligations Name of lender Original amount Present balance Annualized payments Rate Maturity Collateral Sch. 13, Liabilities: Credit cards Name of lender Credit limit Capital One Visa $20,000 American Express Paid in full monthly? Annualized payments $5,000 Present balance $4,000 $1,000 Notes Rate 7.25% No Yes used in place of cash
