PERSONAL FINANCIAL STATEMENT CONSTRUCTION

Construct a Statement of Financial Position as of December 31, 2014, from the information gathered at your first meeting with Marilyn Reynolds.

Construct a Cash Flow Statement for the year ending December 31, 2014, from the information gathered at your first meeting with Marilyn Reynolds

CASE ANALYSIS

Marilyn Reynolds

For the purpose of this assignment, assume today is January 18, 2015. Marilyn Reynolds came to you a few days ago for assistance in developing a financial plan. You are preparing for a second meeting with her. The following notes represent information you have gathered about Marilyn Reynolds.

Your responses to the case analysis questions that follow these notes should be consistent with Marilyn Reynolds circumstances, needs, and goals.

PERSONAL INFORMATION Marilyn Reynolds

52 years old excellent health director of public relations for a large manufacturing firm last years gross salary $ 69,000 employed with the same company for 8 years is likely to be promoted to Vice President position in the next three months divorced 16 years ago, no plans to remarry in the future one grown daughter, Tina, age 27; lives in another city enjoys golfing, tennis, and gardening actively serves on board of directors for the city symphony guild

ASSETS as of 12/31/2014 Residence

three-bedroom home purchased 14 years ago fair market value (FMV) and replacement cost $ 277,500 mortgage note balance $ 73,557 mortgage note for 30 years at 9% interest monthly payment $ 725 (includes principal and interest)

Automobile

Honda - two years old FMV $ 17,250 Clear title

Personal Property

FMV $ 69,000 1 ASSETS as of 12/31/14, continued

Checking account

balance $ 4,725 non-interest bearing no annual fee

Savings account

balance $ 49,500 last years interest $ 378 interest earned was left in the savings account $ 5,400 was deposited in the account over the past year

Stock portfolio

FMV $ 28,500 invested in five blue-chip stocks last years dividends $ 655; not reinvested automatically

Income stock mutual fund

FMV $ 13,500 last years dividends $ 603; not reinvested automatically $ 3,000 was deposited in the account over the past year

INSURANCE INFORMATION

LIFE

Policy 1 Policy 2 Person insured Marilyn Marilyn Face amount $ 69,000 $ 100,000 Type of policy Group term Universal life Beneficiary Tina Tina Contingent Beneficiary Marilyns sister Marilyns sister Policy owner Employer Marilyn Annual premium Employer paid $ 2,050 Cash Value N/A $ 24,900 INSURANCE INFORMATION, continued

Disability

Person insured Marilyn Monthly benefit 60% of monthly salary Definition of disability Split Elimination period 90 days Maximum benefit period To age 65 for accident or illness Annual premium Employer paid

Medical

Person(s) insured Marilyn Type of policy Major medical Coverages 80/20 coinsurance $ 2,000 stop/loss provision $ 1 million lifetime limit Deductible $ 200 Premium Employer paid

Residence

Policy form HO-5 Coverages Dwelling $240,000 Personal property $120,000 Personal liability $400,000/person.occurrence Medical payments $25,000/person/occurrence Deductible $ 500 Annual premium $ 950

Automobile

Type Personal Auto Policy (PAP) Coverages Liability $500,000/accident Medical payments $25,000/person/accident Uninsured motorist $50,000 accident Collision deductible $ 500 Comprehensive deductible $ 250 Total annual premium $ 1,285 LAST YEARS TAX INFORMATION

FICA

$ 5,279

Federal income taxes

$ 12,118 itemizes deductions

State income taxes

$ 2,900

Property taxes on residence

$ 2,865

RETIREMENT/ESTATE PLANNING INFORMATION non-contributory money purchase pension plan provided by Marilyns employer; vested benefits of $ 22,140; beneficiary is Tina pension funds from Marilyns previous employer were rolled over into an IRA; current fair market value is $ 41,427 will drafted 12 years ago; most recent review was two years ago; all assets will be left to Tina, or, in the event Tina predeceases her mother, all to Marilyns sister. In reviewing the will, you find that estate settlement appears to be in accordance with the wishes Marilyn shared with you.

ADDITIONAL INFORMATION all information on all available insurance has been gathered; copies of all policies have been supplied. Marilyn is not the beneficiary of any trusts; however, she is the beneficiary of Tinas group life insurance (given Tinas age and health, it is not expected that these funds will be payable to Marilyn for the foreseeable future); Marilyn does not anticipate any future inheritances. Marilyn has supplied a list of other financial advisors. Marilyn does not receive any financial support from her ex-spouse, nor does she pay any support to him. All financial obligations to each other were satisfied 12 years ago. If Marilyn receives the promotion that she expects, her anticipated annual income will be $82,800. All expenses listed are typical and are expected to remain the same. Other than Marilyns expected promotion, no foreseeable changes in lifestyle are anticipated in the next few years, such as a new residence, new automobile or new job. Credit card balances are currently $1,254; Marilyn pays off balances each month. Wants to assume a 4% inflation rate for planning purposes, which you agree with as being acceptable. No other retirement plans are in place or available.

ADDITIONAL ANNUAL CASH EXPENDITURE INFORMATION

Food $ 4,200 Transportation $ 900 Utilities/household expenses $ 2,010 Vacation/entertainment $ 5,700 Medical/dental $ 485 Clothing/personal care $ 4,800 Charitable contributions $ 2,000 Miscellaneous $ 7,800