Puneet and Theresa Chatterjee 4. Puneet and Theresa Chatterjee are both twenty-eight years old and have a two-year old child, Edward. They have asked you to construct financial statements based on the information provided below. Use this information to calculate the following financial ratios: a. Current Ratio b. Emergency Fund Ratio c. Savings Ratio d. Debt Ratio e. Long-term Debt Coverage Ratio f. Debt-to-Income Ratio g. Front End Mortgage Ratio h. Back End Mortgage Ratio Summarize the Chaterjees' financial situation based on your analysis of these financial ratios. Income and expense (cash flow) information: Income: Puneet and Theresa earned $95,000 in salary. Puneet earned $50,000 as a data analyst, and Theresa made $45,000 as a nursing supervisor. Puneet and Theresa also received $35 in interest from their money market account, which they reinvested. Taxes: Their W-2 tax statements indicate that they paid $7,267 in FICA taxes, $10,500 in federal income tax, and $2,900 in state income taxes. Real estate taxes on their home were $1,800. Personal property taxes on the two vehicles they own equal $360. Insurance: Medical insurance is provided by their respective employers; however, they must pay a portion of the premium, which amounted to $1,400. Their personal automobile policy premiums totaled $1,600. Homeowner's insurance premiums for the year were $1,200. Puneet and Theresa own term life insurance policies, and they paid $500 in premiums for both policies. Loan payments: Mortgage payments amounted to $20,253. Auto loan repayment for their two vehicles totaled $6,600. Student loan payments for Theresa's student loans when she was working toward her master's degree in nursing equal $4,500 for the year, and the boat payments for the year equal $3,112. Savings payments: Puneet and Theresa contributed $4,000 to their retirement accounts, $1,200 to an education fund for their child, and $1,200 to their money market account, and the $35 in interest that they reinvested in the money market account. Daily living expenses: Puneet and Theresa estimate, based on checking account records and credit card statements, that they spent approximately $4,000 on food at home. Clothing expenditures were estimated to be $1,800; laundry and dry-cleaning expenses were $300; and personal care expenses were $1,000. Day care for Edward was $6,000. Expenses for gas and maintenance for their vehicles were $2,000. This year there were no auto repair costs. Variable expenses: They estimate that they spent $1,600 on entertainment, which includes dining out and admission charges for plays, movies, and sporting events. Puneet and Theresa also spent $1,500 on recreation and travel, which is how they categorize vacation expenses. Charitable contributions for the year totaled $2,000. Hobby expenses were $360 for the year. Gifts for family and friends throughout the year were $2,000. Utilities: Utilities for the year cost $4,000, which included $1,840 for gas and electricity, $720 for water, and $1,440 for telephone, Internet access, and cable television. Home maintenance and improvements: They spent $1,200 annually in this category. Miscellaneous expenses: Unreimbursed medical expenses amounted to $300. Asset and liability information: Assets: They have $2,000 in their checking account, $11,000 in their money market account, $6,000 in a mutual fund investment account, $5,500 in the education savings account for Edward, and $20,000 in their retirement accounts. Their home has a fair market value of $185,000, and the blue book value of their vehicles is $7,000 for Vehicle land $5,500 for Vehicle 2. Their furniture and household goods have an estimated value of $20,000; they have sporting equipment estimated at $2,500, and a boat valued at $12,500. Chapter 3 Cash Flow and Net Worth Planning 79 Liabilities: Theresa's and Puneet's current unpaid bills equal $500 and they owe $700 on their Visa credit card but will pay the entire balance off before the due date. They routinely charge during the month, but always pay the balance in full each month. The balance on their home mortgage is $182,510; their auto loan balance for Vehicle 1 is $8,500, and $2,000 for Vehicle 2. The balance on the loan for the fishing boat is $11,855, and Theresa's student loan balance is $5,700. Puneet and Theresa Chatterjee 4. Puneet and Theresa Chatterjee are both twenty-eight years old and have a two-year old child, Edward. They have asked you to construct financial statements based on the information provided below. Use this information to calculate the following financial ratios: a. Current Ratio b. Emergency Fund Ratio c. Savings Ratio d. Debt Ratio e. Long-term Debt Coverage Ratio f. Debt-to-Income Ratio g. Front End Mortgage Ratio h. Back End Mortgage Ratio Summarize the Chaterjees' financial situation based on your analysis of these financial ratios. Income and expense (cash flow) information: Income: Puneet and Theresa earned $95,000 in salary. Puneet earned $50,000 as a data analyst, and Theresa made $45,000 as a nursing supervisor. Puneet and Theresa also received $35 in interest from their money market account, which they reinvested. Taxes: Their W-2 tax statements indicate that they paid $7,267 in FICA taxes, $10,500 in federal income tax, and $2,900 in state income taxes. Real estate taxes on their home were $1,800. Personal property taxes on the two vehicles they own equal $360. Insurance: Medical insurance is provided by their respective employers; however, they must pay a portion of the premium, which amounted to $1,400. Their personal automobile policy premiums totaled $1,600. Homeowner's insurance premiums for the year were $1,200. Puneet and Theresa own term life insurance policies, and they paid $500 in premiums for both policies. Loan payments: Mortgage payments amounted to $20,253. Auto loan repayment for their two vehicles totaled $6,600. Student loan payments for Theresa's student loans when she was working toward her master's degree in nursing equal $4,500 for the year, and the boat payments for the year equal $3,112. Savings payments: Puneet and Theresa contributed $4,000 to their retirement accounts, $1,200 to an education fund for their child, and $1,200 to their money market account, and the $35 in interest that they reinvested in the money market account. Daily living expenses: Puneet and Theresa estimate, based on checking account records and credit card statements, that they spent approximately $4,000 on food at home. Clothing expenditures were estimated to be $1,800; laundry and dry-cleaning expenses were $300; and personal care expenses were $1,000. Day care for Edward was $6,000. Expenses for gas and maintenance for their vehicles were $2,000. This year there were no auto repair costs. Variable expenses: They estimate that they spent $1,600 on entertainment, which includes dining out and admission charges for plays, movies, and sporting events. Puneet and Theresa also spent $1,500 on recreation and travel, which is how they categorize vacation expenses. Charitable contributions for the year totaled $2,000. Hobby expenses were $360 for the year. Gifts for family and friends throughout the year were $2,000. Utilities: Utilities for the year cost $4,000, which included $1,840 for gas and electricity, $720 for water, and $1,440 for telephone, Internet access, and cable television. Home maintenance and improvements: They spent $1,200 annually in this category. Miscellaneous expenses: Unreimbursed medical expenses amounted to $300. Asset and liability information: Assets: They have $2,000 in their checking account, $11,000 in their money market account, $6,000 in a mutual fund investment account, $5,500 in the education savings account for Edward, and $20,000 in their retirement accounts. Their home has a fair market value of $185,000, and the blue book value of their vehicles is $7,000 for Vehicle land $5,500 for Vehicle 2. Their furniture and household goods have an estimated value of $20,000; they have sporting equipment estimated at $2,500, and a boat valued at $12,500. Chapter 3 Cash Flow and Net Worth Planning 79 Liabilities: Theresa's and Puneet's current unpaid bills equal $500 and they owe $700 on their Visa credit card but will pay the entire balance off before the due date. They routinely charge during the month, but always pay the balance in full each month. The balance on their home mortgage is $182,510; their auto loan balance for Vehicle 1 is $8,500, and $2,000 for Vehicle 2. The balance on the loan for the fishing boat is $11,855, and Theresa's student loan balance is $5,700