John and Mary are both graduates of Oxford University and they have been married for five years. They are currently interested in buying a house and a new vehicle. John works as a Physician in New York and he earns $8,000.00 net per month after tax and deductions. Mary is a teacher at a local school where she earns $3,000 net per month after tax and deductions. Their combined gross salaries are $200,000 per year.

They are looking at buying a house that is listed for $525,000 and that would be amortized over 25 years at an annual interest rate of 4.75%. There would be additional costs associated with the property including annual property taxes of $5,200, home insurance of $150 per month, and estimated monthly heat and hydro costs of $250 per month. There would also be additional closing costs associated with the property purchase including property transfer tax on the purchase value paid as a lump sum upfront. They plan on making a 20% down payment on the purchase price of the property.

The vehicle they are considering purchasing is a Mercedes 305 which is retailing for $32,650 including taxes, etc, and the dealer is offering zero down with interest at 6.0% for the duration of the loan which would be for seven years. This would be driven mainly by John and he would be responsible for the loan. Mary owns a 2014 BMW with a market value of $15,000.

As far as assets and liabilities go John and Mary have RRSPs worth $100,000 and $60,000 respectively, and they also have a combined savings/chequing account worth $35,000. John has student loans of $100,000 that are being repaid at 5.5% over a 10-year term. Mary received a $100,000 inheritance and she has these funds sitting in a money market account. They each also have a CIBC Visa that carries a 17% interest rate and requires minimum payments of 3% per month. The balance on Johns card is $10,000 and Mary owes $5,000. They each have lines of credit where they could each borrow $30,000 at prime + 1% (interest only) if they needed to. Their personal possessions are worth approximately $50,000 each.

They expect to spend $1000 per month on food $600 per month on entertainment estimated auto insurance will cost $150 per month for John and $125 for the Mary estimated fuel costs of $300 each per month gym membership for John of $100 per month fitness classes for Mary of $150 per month john spends approximately $600 per month on lunches eating out they each spend $1,500 per year on gifts for friends and family they expect personal care (like haircuts) to cost $150 per month clothing/dry-cleaning is expected to cost a total of $175 per month household cleaning supplies will cost $100 per month they also expect that they spend $300 per month each on miscellaneous items like coffee, newspapers, etc.

A. Prepare a net worth statement for Ron and Janice using the asset and liability information provided. Assume they have purchased the house and car at the prices indicated along with property transfer tax.

NET: WORTH STATEMENT JOHN AND MARY MAWSON June 15th, 2020 ASSETS LIABILITIES SHORT TERM & INVESTMENT ASSETS AND LIABILITIES CHEQUING/SAVINGS ACCOUNT - John AND Mary MONEY MARKET FUND - MARY PROPERTY TRANSFER TAX PAYABLE AS LUMP SUM RRSP'S - JOHN RRSP'S - MARY STUDENT LOANS - JOHN CIBC VISA-JOHN CIBC VISA-MARY LINE OF CREDIT - MARY ($30,00 AVAILABLE) LINE OF CREDIT - JOHN ($30,00 AVAILABLE) 0 0 0 0 0 0 0 0 0 0 O O O O O O O O O O Total Short-Term & Investment Assets and Liabilities: $0 $0 0 LONG TERM ASSETS AND LIABILITIES PRINCIPAL RESIDENCE TOYOTA CAMRY - MARY SUBARU FORESTER - JOHN PERSONAL POSSESSIONS - MARY PERSONAL POSSESSIONS - JOHN ART, ANTIQUES, JEWELLERY 0 0 0 0 0 0 0 0 0 0 0 Total Long-Term Assets & Liabilities: $0 $0 TOTAL ASSETS AND LIABILITIES $0 $0 NET WORTH $0 NET: WORTH STATEMENT JOHN AND MARY MAWSON June 15th, 2020 ASSETS LIABILITIES SHORT TERM & INVESTMENT ASSETS AND LIABILITIES CHEQUING/SAVINGS ACCOUNT - John AND Mary MONEY MARKET FUND - MARY PROPERTY TRANSFER TAX PAYABLE AS LUMP SUM RRSP'S - JOHN RRSP'S - MARY STUDENT LOANS - JOHN CIBC VISA-JOHN CIBC VISA-MARY LINE OF CREDIT - MARY ($30,00 AVAILABLE) LINE OF CREDIT - JOHN ($30,00 AVAILABLE) 0 0 0 0 0 0 0 0 0 0 O O O O O O O O O O Total Short-Term & Investment Assets and Liabilities: $0 $0 0 LONG TERM ASSETS AND LIABILITIES PRINCIPAL RESIDENCE TOYOTA CAMRY - MARY SUBARU FORESTER - JOHN PERSONAL POSSESSIONS - MARY PERSONAL POSSESSIONS - JOHN ART, ANTIQUES, JEWELLERY 0 0 0 0 0 0 0 0 0 0 0 Total Long-Term Assets & Liabilities: $0 $0 TOTAL ASSETS AND LIABILITIES $0 $0 NET WORTH $0