QUESTION 3: Sandra and Sandford have a 3 year old daughter and are expecting their 2nd child. They both are 30 years old. They own a house which worth $500,000. Their monthly payment on mortgage loan is $2100. Interest rate is 0.25% per month. It will take them 15 years to pay off the loan. Sandra is a chemist with a pharmaceutical firm, earning $60,000 a year, and after all deductions she takes home $1,750 every two weeks. Sandford is a plumber with TDSB earning $80,000 per year, and after all deductions he takes home $2,300 every two weeks. They would like to buy a bigger house. The house they like will cost around $800,000. They came to you for advice and have provided you with the following additional information. Cash on hand $ 1.000 Chequing account 4,000 Canada Savings Bond 30,000 Home 500,000 Sandra's car 35,000 Sandford's car 5.000 Bills outstanding: Master Card 1,500 AMEX 1.000 Estimated monthly expenditures: Mortgage loan payment 2,100 Car loan payment 600 Furniture loan 400 Groceries 1.000 Gas and maintenance for the cars 1.200 Day care 700 Utilities 400 Property taxes 450 Insurance (cars) 300 Insurance (house) 80 Repair and maintenance expenses for the house 250 Newspaper and magazines 40 Entertainment 300 Clothes 300 Miscellaneous 100 Personal Assets 50.000 Sandra's RRSP in metals and minerals mutual fund 30.000 Sandford's RRSP in East European Equity mutual fund 40,000 Cash Surrender Value of Life Insurance policies 17.000 Two years ago the family bought some furniture. They have a furniture loan at an interest rate of 0.6% per month. It requires monthly payment of $400, and will be paid off in 15 months. Sandra still has to pay $600 per month for 30 months to pay off her car loan. She pays 0.5% per month interest on the car loan. The family usually takes one vacation a year at a cost of $5,000 per year. a. Using the information provided, prepare a balance sheet and income statement for the family for the last year. Assume they had no taxes owing or refunded. b. Discuss and comment on their financial situation, and make recommendation. Assume in real terms there will be no change in their income and expenses