I am having a hard time creating the balance sheet with the data given on page page 2 and 3. I know I am not suppose to include dining out, hobbies, maid, dry cleaning and parking tolls but do I include the utilities as current liabilities? Please help.

Eric and Tammy Taylor Case FIN 430/530 - Personal Financial Planning Professor - Dr. Jared Pickens, AFC CFP Due 11/06 - upload 1 copy for group (word document and excel) Must work in groups of 3 or 4. You are a new, but highly educated financial planner and need to prepare some financial statements and answer some questions for your clients, Eric and Tammy Taylor. Since you have been learning from the best financial planning instructor from Amarillo, Texas, you should have no problem providing your clients with the following: Case Requirements Graduate 1. Create a year-end net worth statement (balance sheet) and annual cash flow statement (income/expense statement) for the Taylor family given the data on the next page. 2. Use the financial ratios discussed in the book to identify the Taylor's strengths and weaknesses. a. b. c. d. Liquidity ratios (2) Housing (front and back end) Savings ratio Debt to Assets ratio 3. Help answer a list of questions (5 for undergraduates and 7 for graduates) that Eric and Tammy have about the industry of financial planning, insurance, debt repayment, retirement, and taxes. 4. Identify the Taylor's top spending areas using charts from excel. 5. Upload Word and Excel documents (one person for the group needs to submit this). The Taylor Family Profile FIN 430/530 - Dr. Jared Pickens, CFP, AFC Coach Eric Taylor and his wife Tammy recently relocated to McKinney, Texas from Dillon, Texas. The Taylor family is now your typical suburban family living in Frisco, Texas. Eric and Tammy met at a football game during college and it was love at first sight. They have been married for several years and have two children that are currently (ages 15 and 1). Eric (age 45) and Tammy (age 43) both work. Eric is the head football coach at Pickens High School and Tammy is the guidance counselor. The Taylors want to make sure that they are tracking their expenses, meeting or exceeding important financial ratios and understand where they currently are in terms of assets, liabilities and net worth. They also have put together a list of questions for you to answer. The Taylors are very visual learners so graphs, charts, tables, and bullet points are important. The Taylor's Financial Information (monthly figures): Data provided as of 12/31/2015 Tammy's Monthly Salary Jewelry 401(k) Account (His) Dividend/Interest Income (monthly) 401(k) Account (Her) Mortgage Payment (PITI) Boat Infiniti Payment 2007 Jeep Patriot Jeep Payment Harley Payment Furniture BB National Credit Card Payment Explorer Loani Sears Credit Card Payment Brokerage Account Cable Alarm System BB National CCii Life Insurance Internet Gas Cellphone Eric 's Monthly Salary Harley Davidson Water Sears CCiii Entertainment FIN 430/530 - Dr. Jared Pickens, CFP, AFC 2,500 6,500 110,368 47 42,581 1,777 8,000 448 12,000 240 210 12,300 195 16,000 305 3,700 120 39 6,837 140 100 370 130 8,800 21,000 110 8,320 400 Auto Insurance Child Care Home Repairs 2010 Ford Explorer Groceries Checking (Joint) Bank CD (Joint) Dining Out Hobbies Savings Account Roth IRA (His) Harley Davidson Loaniv Dry Cleaning Charity Primary Mortgage v Landscaping Maid Parking and Tolls Dividend/ Interest Reinvestment Student Loan Payment Eric 's 401(k) contributions Student Loans H Tammy's 401(k) contributions Cash Savings Contribution Jeep Auto Loanvii Eric 's Roth Contributions Total Taxes (FICA AND INCOME TAX) Primary Home (VALUE) Questions FIN 430/530 - Dr. Jared Pickens, CFP, AFC 152 1,400 200 22,500 500 2,000 4,000 300 100 2,300 10,298 21,000 75 100 180,000 300 400 80 47 320 300 37,000vi 250 300 10,000 210 18,000 240,900 1. Eric and Tammy are very sensitive to commission charges and expenses. Furthermore, they are concerned with the recent horror stories they have heard about in the financial services industry. Assuming that you are a CERTIFIED FINANCIAL PLANNER Practitioner, explain to your clients the different types of fee structures a planner can charge and elaborate on the process required to get your designation. Finally, explain fiduciary responsibility and why it is or isn't important. 2. Eric and Tammy feel like they will live in their home forever. They are considering refinancing their home. Eric and Tammy were told by a mortgage broker that they would qualify for a 3.8% rate on a 15 year or 4% on a 30-year mortgage. Provide an analysis showing the pros and cons of each decision. Remember to look at financial ratios. Remember that Eric and Tammy are very visual learners. Assume that refinance costs are $5,500 and will be rolled into the new loan. 3. The Taylors would like to know your recommendations on an approach to get out of debt. They have told you that all options are on the table in terms of cutting expenses, but they are not sure how to put together a payoff plan or which debt to attack first. Please use powerpay.org and provide some recommendations for paying off all of their debts. Please provide an amortization sheet of the payoff plan. Please explain your strategy. 4. Eric and Tammy are concerned if they have adequate insurance for their auto, home and life. They have a split limit policy of $50k/$100k/$50 for liability limits and $500 deductibles, but they don't understand what this really means. Eric and Tammy also have their home insured 100% of its actual cash value and they have replacement cost coverage on their property. They would like you to explain to them what these numbers mean and provide guidance if needed. 5. Eric and Tammy might receive a settlement in the amount of $1,200,000. Eric and Tammy want to know how to make sure their money is protected from a bank failure and that the money stays extremely liquid. Please help educate Eric and Tammy on the FDIC. ONLY GRADUATE STUDENTS ARE REQUIRED TO ANSWER QUESTIONS 6 AND 7 6. The Taylors are not sure if they are currently withholding enough federal income taxes. They are projected to withhold $10,200. If they are using the standard deduction, what is their estimated total tax bill due using 2016 tax brackets? Should they increase or decrease their withholding? 7. The Taylors want to know if they are saving enough for retirement. They believe they will need $120,000 per year in retirement. They will retire in 20 years and expect to need income for 30 years. They believe that inflation will be 3.5% and they will earn 6.5% on their investments. They FIN 430/530 - Dr. Jared Pickens, CFP, AFC don't want to include social security in their projections. How much will the need to meet their retirement goal? How much (if any) additional savings do they need to make on an annual basis? Please use the three step process outlined in the online lecture. i 3% interest rate. Length of loan unknown 24% interest rate iii 18% interest rate iv 6% rate on loan. Remaining terms unknown. v This is the approximate balance of the mortgage. The current interest rate is 6.25% and the original loan amount was for $200,000. The mortgage is a 30-year mortgage. vi Student Loans were just consolidated. Interest rate is 6% vii Interest rate is 5% and original term of the loan is unknown ii FIN 430/530 - Dr. Jared Pickens, CFP, AFC TAYLOR FAMILY INCOME STATEMENT EXTRACT Income Divident interest 47 Expenses Tammy's monthly salary Mortgage payment Infinits payment Harley payment Cable Alarm system BB National credit card payment Sears credit card payment life insurance interest Gas Cellphone Erics monthly salary Water Entertainment Auto insurance Child care Home repairs Dining out Hobbies Dry cleaning Roth, IRA,(his) Charity Landscaping Maid Parking & Tolls Students loan repayment Eric's 401 (k) contribution Tammys 401 (k) contribution Taxes Interest on: Harley davidson loan Primary Mortgage Jeep Autoloan Sears BB National cc Explorer loan 2500 1777 488 210 120 39 195 305 140 100 370 130 8800 110 400 152 1400 200 300 100 75 10298 100 300 400 80 320 300 250 18000 1260 11250 500 1497.6 1640.88 480 47 Net loss 64587.48 -64540.48 rate Harley davidson loan Primary Mortgage Jeep Autoloan Sears BB National cc Explorer loan 6% 6.25% 5% 18% 24% 3% amount 21000 180000 10000 8320 6837 16000 TAYLOR FAMILY BALANCE SHEET EXTRACT ASSETS Jewerly 402 (k) accounts (his) 401 (k) account(hers) Boat 2007 jeep patriot Furniture Brokerage account 2010 Ford explorer Groceries Checking (joint) Bank CD (joint) Savings account Dividends interest Primary home (value) cash savings contributed Eric roth contributions TOTAL ASSETS Liabilities Explorer loan Jeep autoloan Primary mortgage Harley Davidson loan Student loan Loss b/f Total liabilities 6500 110368 42581 8000 12000 12300 3700 22500 500 2000 4000 2300 47 240900 300 210 468206 16000 10000 180000 21000 37000 64540.48 328540 TAYLOR FAMILY INCOME STATEMENT EXTRACT Income Divident interest 47 Tammy's monthly salary 2500 Erics monthly salary 8800 Expenses Mortgage payment Infinits payment Harley payment Cable Alarm system BB National credit card payment Sears credit card payment life insurance interest Gas Cellphone Water Entertainment Auto insurance Child care Home repairs Dining out Hobbies Dry cleaning Roth, IRA,(his) Charity Landscaping Maid Parking & Tolls Students loan repayment Eric's 401 (k) contribution Tammys 401 (k) contribution Taxes Interest on: Harley davidson loan Primary Mortgage Jeep Autoloan Sears BB National cc 1777 488 210 120 39 195 305 140 100 370 130 110 400 152 1400 200 300 100 75 10298 100 300 400 80 320 300 250 18000 1260 11250 500 1497.6 1640.88 11347 Explorer loan Net loss 480 64587.48 -53240.48 rate Harley davidson loan Primary Mortgage Jeep Autoloan Sears BB National cc Explorer loan amount 6% 6.25% 5% 21000 180000 10000 18% 24% 3% 8320 6837 16000 TAYLOR FAMILY BALANCE SHEET EXTRACT ASSETS Jewerly 402 (k) accounts (his) 401 (k) account(hers) Boat 2007 jeep patriot Furniture Brokerage account 2010 Ford explorer Groceries Checking (joint) Bank CD (joint) Savings account Dividends interest Primary home (value) cash savings contributed Eric roth contributions TOTAL ASSETS Liabilities Explorer loan Jeep autoloan Primary mortgage Harley Davidson loan Student loan Loss b/f Total liabilities 6500 110368 42581 8000 12000 12300 3700 22500 500 2000 4000 2300 47 240900 300 210 468206 16000 10000 180000 21000 37000 -53240.5 210760 TAYLOR FAMILY INCOME STATEMENT EXTRACT Income Divident interest 47 Expenses Tammy's monthly salary Mortgage payment Infinits payment Harley payment Cable Alarm system BB National credit card payment Sears credit card payment life insurance interest Gas Cellphone Erics monthly salary Water Entertainment Auto insurance Child care Home repairs Dining out Hobbies Dry cleaning Roth, IRA,(his) Charity Landscaping Maid Parking & Tolls Students loan repayment Eric's 401 (k) contribution Tammys 401 (k) contribution Taxes Interest on: Harley davidson loan Primary Mortgage Jeep Autoloan Sears BB National cc Explorer loan 2500 1777 488 210 120 39 195 305 140 100 370 130 8800 110 400 152 1400 200 300 100 75 10298 100 300 400 80 320 300 250 18000 1260 11250 500 1497.6 1640.88 480 47 Net loss 64587.48 -64540.48 rate Harley davidson loan Primary Mortgage Jeep Autoloan Sears BB National cc Explorer loan 6% 6.25% 5% 18% 24% 3% amount 21000 180000 10000 8320 6837 16000 TAYLOR FAMILY BALANCE SHEET EXTRACT ASSETS Jewerly 402 (k) accounts (his) 401 (k) account(hers) Boat 2007 jeep patriot Furniture Brokerage account 2010 Ford explorer Groceries Checking (joint) Bank CD (joint) Savings account Dividends interest Primary home (value) cash savings contributed Eric roth contributions TOTAL ASSETS Liabilities Explorer loan Jeep autoloan Primary mortgage Harley Davidson loan Student loan Loss b/f Total liabilities 6500 110368 42581 8000 12000 12300 3700 22500 500 2000 4000 2300 47 240900 300 210 468206 16000 10000 180000 21000 37000 64540.48 328540 TAYLOR FAMILY INCOME STATEMENT EXTRACT Income Divident interest 47 Tammy's monthly salary 2500 Erics monthly salary 8800 Expenses Mortgage payment Infinits payment Harley payment Cable Alarm system BB National credit card payment Sears credit card payment life insurance interest Gas Cellphone Water Entertainment Auto insurance Child care Home repairs Dining out Hobbies Dry cleaning Roth, IRA,(his) Charity Landscaping Maid Parking & Tolls Students loan repayment Eric's 401 (k) contribution Tammys 401 (k) contribution Taxes Interest on: Harley davidson loan Primary Mortgage Jeep Autoloan Sears BB National cc 1777 488 210 120 39 195 305 140 100 370 130 110 400 152 1400 200 300 100 75 10298 100 300 400 80 320 300 250 18000 1260 11250 500 1497.6 1640.88 11347 Explorer loan Net loss 480 64587.48 -53240.48 rate Harley davidson loan Primary Mortgage Jeep Autoloan Sears BB National cc Explorer loan amount 6% 6.25% 5% 21000 180000 10000 18% 24% 3% 8320 6837 16000 TAYLOR FAMILY BALANCE SHEET EXTRACT ASSETS Jewerly 402 (k) accounts (his) 401 (k) account(hers) Boat 2007 jeep patriot Furniture Brokerage account 2010 Ford explorer Groceries Checking (joint) Bank CD (joint) Savings account Dividends interest Primary home (value) cash savings contributed Eric roth contributions TOTAL ASSETS Liabilities Explorer loan Jeep autoloan Primary mortgage Harley Davidson loan Student loan Loss b/f Total liabilities 6500 110368 42581 8000 12000 12300 3700 22500 500 2000 4000 2300 47 240900 300 210 468206 16000 10000 180000 21000 37000 -53240.5 210760