Answer the following questionsWhat do you think of Brad and Barbara’s seeking help for Brad’s parents?What prompted Richard to seek assistance? Was it only because of Brad and Barbara?What type of financial plan seems appropriate for Richard and Monica and why do you think Monica didn’t react more negatively to the financial news? Brad and Barbara arranged to come in to see me. They were both young college graduates and arrivedwearing jeans and T-shirts. I soon found out they were recently married and lived with Brad's parents,Richard and Monica, in the basement of the their house. Brad and Barbara paid for all of their ownexpenses. His parents got along extremely well with Barbara and treated her as one of their children.Recently the relationship between them had been deteriorating. When they weren't arguing, they werewhispering to each other. Both Brad and Barbara had overheard some of their conversations, whichseemed to be about money and investing. Brad was very close to his uncle Tim and asked his advice aboutthe situation. He suggested that Brad and Barbara recommend that their parents see a financial planner.Tim thought Brad and Barbara should meet the planner prior to discussing their recommendation withtheir parents. He had one advisor in mind. Tim said that Brad's parents were both educated and unusuallyopen in their discussions. Brad and Barbara should relay to the parents their concems, including the factthat the parents' problems were beginning to affect their own lives. Tim said that Brad and Barbara shouldsuggest handling the financial concerns as a family problem that could be worked out together, one thatcould bring the four of them closer. He was sure they would respond favorably.In fact the uncle was correct. My meeting with Brad and Barbara was very constructive, and I gainedinsight into the parents. Thereafter, Richard, the father, called and made an appointment. Interestingly, hementioned that Brad and Barbara had some financial issues themselves. The detailed planning was to bedone for the parents, but the engagement also would cover any planning that Brad and Barbara wanteddone.Richard walked tentatively into my office early one evening. He glanced around nervously and dosed thedoor behind him. I could sense that there was no need for small talk. He wanted to tell me his story.Richard, age 58, told me he had grown up in a small town and had married the high-school prom queen.He described Monica as a sweet and caring wife, as beautiful at 54 as she was at 18. He indicated that shewould be devastated by his news. He became choked up, and we paused for a minute.The news was that he had lost $200,000 in a speculative investment. He mentioned that his $550,000 inretirement assets was down to a current figure of $350,000. He asked me to help them without telling hiswife of the loss. I told him that if I took an assignment that involved two people, there would have to behonesty all around. He mentioned again that he thought she would be devastated. My response was thateven if we hid it, the true story would come out eventually anyway. I thought that he and Monica shouldcome in next and we would start the process.At our next meeting, Richard came in first, and we waited for Monica. She entered the room, a tall, elegantwoman with a ready smile. We engaged in some small talk, and after a time, I stated that Richard hadsomething to say. When he broke the news, she was not as frail and sensitive as Richard had feared. Shewas visibly shaken but said their recent arguments over money had made her suspicious. She then askedhow we could "make it up." l indicated I would help but first wanted some particulars.Richard was a lawyer who worked in the entertainment industry. When he got out of college, he wanted tobe a rock star, but his parents persuaded him to do something "more substantial." Monica had gone to astate school and majored in English. She did a little writing but spent most of her time raising her childrenwhen they were young and the rest of it now in community activity.They had married when Richard finished college and Monica graduated from high school. Theirgraduation ceremonies took place on the same day, and fortunately they were able to make both. Theyhad two children, son Brad and a younger daughter Stacy. Both were married, but Stacy and her husbandwere separated, and Richard and Monica were helping her pay her bills.The couple indicated that they were saving about $20,000 a year gross but admitted that vacations andspecial expenditures came out of that pool.They wanted to retire when Richard turned 65. In retirement, they wanted the same lifestyle that theycurrently had. They did mention that it didn't have to be in the high-cost metropolitan region they lived inthen; it could be in a retirement community in Arizona. They wanted to make sure that Stacy was given atleast $10,000 per year in income once they passed away. They had approximately $200,000 in lifeinsurance on Richard's life. They wanted a total review of their assets and to examine the sensibility of thatthe age 65 retirement.I looked around and Richard seemed relieved that Monica had fully recovered.

What do you think of Brad and Barbara’s seeking help for Brad’s parents? Ans: As they are recently…

Answer the following questions What do you think of Brad and Barbara’s seeking help for Brad’s parents? What prompted Richard to seek assistance? Was it only because of Brad and Barbara? What type of financial plan seems appropriate for Richard and Monica and why do you think Monica didn’t react more negatively to the financial news?

Answer the following questions What do you think of Brad and Barbara’s seeking help for Brad’s parents? What prompted Richard to seek assistance? Was it only because of Brad and Barbara? What type of financial plan seems appropriate for Richard and Monica and why do you think Monica didn’t react more negatively to the financial news?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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