Question $($b$)$

Directions: Click the Case Link above and use the information provided in the Melissa Carter case and the following assumptions to answer this question:

The amount in her retirement account can be converted to cash, but converting it would incur taxes and penalties totaling $50\%$

The values shown for her residences and the land and building leased to Carter Distributors are verified amounts

Do not include the $$100,000$ household furnishings and personal property when calculating adjusted net worth

As a guarantor for a loan to Carter Distributors, Inc., what is Melissa Carter's ratio of total liabilities to adjusted net worth?

$0\mathrm{.}64$

$0\mathrm{.}84$

$1\mathrm{.}99$

$2\mathrm{.}53$

$$

$$

ASSETSCash on hand and in banks $($Sch$.1)$Government securities $($quaranteed$)$Listed secunitbes $($Sch$.2)$Unlisted securities $($Sch$.3)$Accounts and notes receivable $($Sch$.4)$TOTAL LIQUID ASSETSResidential real estate $($Sch$.5)$Non$-$residential real estate $($Sch$.6)$Cash value of life insuranceAutomobiles $($Sch$.7)$Household furnishings & personal propertyOther assets $($Sch$.8$ & $9)$Retirement accounts $(401($k$),$ Keogh, IRA, etc.$)$TOTAL ASSETSANNUAL INCOMESalaryInterestDividendsResidential real estate income $($Sch$.5)$Non$-$residential real estate income $($Sch$.6)$Other business income $($Sch$,3$ and $8)$Other recurring income $($Sch$,9)$Non$-$recurring or variable incomeCommissions and bonusesOther: Capital gains, net of lossesOther.TOTALPERSONAL INFORMATIONBusiness or occupation:Owner & President, Carter Distributors, Inc.Partner or officer in other venture$($s$)($Ust$)$:Catteine Connections, Inc.Name$($s$)$ and age$($s$)$ of dependentsKatie $(11),$ Ciff $(6)$CONTINGENT LIABILITIESAs endorser, co$-$maker, or guarantor?Pending legal claims against you?Borrower's signatureMelussa CarterComplete all blanks; enter $0,$ no$,$ or none if appropriate.S$750,0003,600,000180004,433,000505,00065,0001,30,0001/12/$Y$424000100,0006,612,000$No$200,000400\mathrm{.}000125029,200120,000335,00073,000958450$Enter Yes or NoYesLIABILITIES & NET WORTHShort$-$term and demand notes payable to banks andothers $($Sch$.10)$Margin debt $($Sch$,11)$Unpaid taxes and interest due this yearOther current liabilities $($list belo$)$Residential real estate mortgages $($Sch$.5)$Non$-$residential real estate mortgages $($Sch$.6)$Auto loans $($Sch$.7)$Other loans and obligations $($Sch$.12)$Credit cards $($Sch$.13)$Other $($list$)$:TOTAL LIABILITIESNET WORTHANNUAL EXPENSESMortgage payments, residential RE $($Sch$.5)$Mortgage payments, non$-$residential RE $($Sch$.6)$Other loan & creditKequired partnerakPayments $($SchtributionsTaxes: Income, real estate, etc.Insurance premiumsUving expenses, etcAlimony, child support, separate maintenanceCharitable contributionsOther contractual obligations $($tulition$,$ etc.$)$Other $($attach list$)$TOTALGENERAL INFORMATIONAre any assets pledged? List$\mathrm{.}7,10,12,13)5$Homes, commercial real estate, auto, jewelryAre you defendant in any suits or legal action?Have you ever made a composition settlement?Have you taken bankruptcy? If yes, when?Are any assets heid in trust?Circumstances and potential liabilityGuarantor for various lons to Carter Distributors, IncCo$-$borrower's signatureSSSYes$40,000$NoNoNo$172,130860,6555,526,0158,2001,085,985$Yes$5\mathrm{.}00031,476170,75252\mathrm{.}590566,018366,000$Enter Yes or No$5,20030,00010,000$