Julia invested a $120,000 inheritance into two different portfolios listed below ($80000 in portfolio #1 and $40,000 in portfolio #2). Portfolio #1 Type of investment Return after 1 year 7% growth 13% growth 21% growth 20% in corporate bonds 25% in income stocks 15% in growth stocks 10% in penny stocks (speculative stocks) Remainder in a 10-year certificate of deposit(CD) 77% decline 2% growth Portfolio #2 Return after 1 year 6% growth 15% growth 28% growth Type of investment 20% in corporate bonds 25% in income stocks 30% in grovrih stocks 15% in penny stocks (speculative stocks) Remainder in a 10-year certificate of deposit(CD) 64% decline 2% growth 1. Identify the percentage gain/loss and the monetary gain/loss for each portfolio. 2. Why do you think Julia may have split the amount of money in each portfolio in the way she did. 3. What is the total percentage gain/loss and monetary gain/loss for the entire inheritance.

Julia invested a $120,000 inheritance into two different portfolios listed below ($80000 in portfolio #1 and $40,000 in portfolio #2). Portfolio #1 Type of investment Return after 1 year 7% growth 13% growth 21% growth 20% in corporate bonds 25% in income stocks 15% in growth stocks 10% in penny stocks (speculative stocks) Remainder in a 10-year certificate of deposit(CD) 77% decline 2% growth Portfolio #2 Return after 1 year 6% growth 15% growth 28% growth Type of investment 20% in corporate bonds 25% in income stocks 30% in grovrih stocks 15% in penny stocks (speculative stocks) Remainder in a 10-year certificate of deposit(CD) 64% decline 2% growth 1. Identify the percentage gain/loss and the monetary gain/loss for each portfolio. 2. Why do you think Julia may have split the amount of money in each portfolio in the way she did. 3. What is the total percentage gain/loss and monetary gain/loss for the entire inheritance.

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter3: Computing The Tax

Section: Chapter Questions

Problem 23CE

See similar textbooks

Similar questions

Big owns 70% of Little and uses the equity method to account for its investment in Little. In 2020, Big reports Dividends of $800,000. Little reports Dividends of $300,000. For what amount is worksheet entry “D” (Dr. Investment. Cr. Dividends Paid) prepared for ?
During 2018. Roberto sold 830 shares of Casual Investor Mutual fund for $8.875 per shares. The shares were purchased on the following dates Date Shares PriceMay 31, 2014 400 $9,375September 18, 2015 225 $8,500October 21, 2015 425 $10,000January 12, 2017 276 $7,125 Calculate the gain (loss) on the under the following assumption (carry your calculation to three places): a. Basis is calculated using the first-in, first-out method. b. Basis is calculated using the average cost method (assume all shares are long-term).
Over a four-year period, LaKeisha Thompson purchased shares in the Oakmark Investor Class Fund. Using dollar cost averaging, calculate the number of shares before completing this problem. (Round your answers to the nearest whole number.) Year Investment Amount Price per Share Number of SharesFebruary 2017 $1,400 $53.00 February 2018 $1,400 $ 34.00 February 2019 $1,400 $47.40 February 2020 $1,400 $55.00 a. At the end of four years, what is the total amount invested? b. At the end of four years, what is the total number of shares purchased? (Round your intermediate calculations and final answer to the nearest whole number.) c. At the end of four years, what is the average cost for each share? (Round
Adam purchases 1,200 shares of Beta Inc. at $22 per share [inclusive of commissions] and sells them after 1 year, during which time the stock also pays a dividend. The following information is also available: Sale price = $25 Leverage ratio = 1.5 Call money rate = 5% Dividend = $0.20 per share Commission = $0.03 per share Maintenance margin = 20% Assume that the interest on the loan and the dividend are both paid at the end of the year. Adam’s return on this investment is closest to: 18.52% 19.35% 22.39% 24.52% 28.52%
b. Mr. Ahmed recently purchased 100 shares of Green Isle mutual fund at a net asset value of $39 per share. During the year MrAhmed received dividend income distributions of $2.00per share and capital gains distributions of $4.00per share. At the end of the year the mutual fund had 13,000,000 shares outstanding, assets of $550,000,000 and liabilities of $30,000,000. What was Ahmed's rate of return on this investment? Please solve with working
For the last two years, Margaret Lane has Invested in the shares of Garod Inc. Details of her purchases and sales of these shares are as follows: Shares Purchased (Sold) Per Share Value January 2020 Purchase 300 $4.75 July 2020 Purchase 200 5.25 November 2020 Sale (250) 5.40 July 2021 Purchase 400 5.50 December 2021 Sale (150) 4.80 Determine Ms. Lane's taxable capital gains and allowable capital losses for 2020 and 2021.
Aranda Corporation made the following cash purchases of securities during 2020, which is the first year in which Aranda invested in securities. 1. On January 15, purchased 10,000 shares of Sanchez Company's common stock at $33.50 per share plus commission $1,980. 2. On April 1, purchased 5,000 shares of Vicario Co.'s common stock at $52.00 per share plus commission $3,370. 3. On September 10, purchased 7,000 shares of WTA Co.'s preferred stock at $26.50 per share plus commission $4,910. On May 20, 2020, Aranda sold 4,000 shares of Sanchez Company's common stock at a market price of $35 per share less brokerage commissions, taxes, and fees of $3,850. The year-end fair values per share were Sanchez $30, Vicario $55, and WTA $28. In addition, the chief accountant of Aranda told you that the corporation plans to hold these securities for the long-term but may sell them in order to earn profits from appreciation in prices. The equity method of accounting is not appropriate for…
Sarah and James Hernandez purchased 160 shares of Cisco Systems stock at $20 a share. One year later, they sold the stock for $26.40 a share. They paid a broker $22 commission when they purchased the stock and a $30 commission when they sold the stock. During the twelve month period they owned the stock, Cisco Systems paid dividends that totaled $0.24 per share. Calculate the Hernandez’s total return for this investment.
Kim Company bought 30% of the shares of Phelps, Inc., at the start of 2018. Kim paid $10 million for the shares.Thirty percent of the book value of Phelps’s net assets is $8 million, and the difference of $2 million is due toland that Phelps owns that has appreciated in value. During 2018, Phelps reported net income of $1 million andpaid a cash dividend of $0.5 million. At what amount does Kim carry the Phelps investment on its balance sheetas of December 31, 2018?
Greg purchased 200 shares of XYZ stock at $90 per share 8 years ago. Today he told all 200 shares for $20,000. What was his average annual compound return on this investment (ignoring taxes and inflation)? (Please use and round to two decimals) a. 1.01 b. 1.46 c. 1.54 d. 1.33
John owns 6,000 shares of KLM stock, 2,000 shares of BBT Mutual fund, and 10,000 shares of Centex Corporation. Her 1099-DIV forms from these investments showed the following: KLM: $3 per share distribution all reinvested in KLM BBT Mutual fund: $5 per share distribution, $1 of which represents a capital gain distribution; none of this is reinvested. Centex: $2 per share distribution, all of which represents a return of capital. How much must John include in his income in the current year? a. $40,000 b. $28,000 c. $48,000 d. $19,000
During 2021, Scott Peterson purchased 275 shares of common stock issued by true state manufacturing for $13,800 including commission. Later in the same year, Scott sold the shares for 14,000 after commission. Calculate the following: 1. Profit on this stock transaction 2. Percentage return on investment %