Question

Chapter 9 Steve (Slick) Willy, 45, just got out of jail. As a reformed citizen on parole, Slick decides to go into business for himself. He starts a collections company to help companies collect debts. The terms of his parole stipulate that he pay restitution payments to the federal government of $400 a month, or 10 percent of his income, whichever is greater. As his parole officer, you notice that after a year out of jail, Slick makes some interesting purchases. First, he buys a new Jaguar, which he drives to parole meetings. Second, he moves into an expensive neighborhood on the north side of town and takes a cruise to Jamaica with his 19-year-old girlfriend. Yet, he has never been late making his $400 monthly payments to the federal government. After obtaining a subpoena for his bank records, you notice that he has only $1,000 in his account. About this time, you receive a call from a man who is making payments to Slick's collection company. He states that Slick is threatening to break his legs and hurt his family if he doesn't pay Slick's company. The man says Slick demands the checks be made out to a woman, not a company. This complaint convinces you to investigate Mr. Willy and his girlfriend. A search of UCC filings in the county shows that Slick's girlfriend owns three cars costing a total of $85,000, a $360,000 house, and a company called Tak'it From You. You check her bank account and see that more than $45,000 is moving through the account each month. You decide to dig through Slick and his girlfriend's trash a few times each month. In these searches, you find evidence that supports the following: three car payments totaling $2,000 per month3; a $2,600 monthly mortgage payment; a credit card balance of $6,500, with $200 monthly payments; a balance of $13,500 owed to Home Shopping Netvork, with $600 monthly payments; $350 food payments during the past two weeks; and a $3,650 payment tojamaican Cruise Lines. After searching the girlfriend's trash, you talk to her neighbors, friends, and co-workers and determine that she and Slick spend between $1,500 and $2,500 a month on miscellaneous items and trips. One neighbor tells you that Slick just gave his girlfriend a diamond ring that cost $4,500. Slick's girlfriend works as a waitress at a small restaurant and makes only $16,500 a year. (Note: Assume that both Slick and his girlfriend's net worth last year were zero.) Question: Use this information to prepare a net worth analysis of Slick's girlfriend. (Ignore interest in your calculations.)

Answer 1

Net Worth Analysis of Slick's Girlfriend
Details	Amount ($)
3 cars costing	85,000
House	3,60,000
Amount moving through her Bank Account	45,000
Mortgage	1,10,500
As per Question -- 3 car payments totalling $ 2000 / Month and mortgage payment $ 2600
($85000/2000*2600)
Credit Card balance	-6,500
Monthly payment Home shopping network	-7,200
( $600 per month *12)
Food payment
( $350 *52)	-18,200
Payment to Jamaica Cruise line	-3,650
Diamond ring as gift	4,500
Income from small Restaurant	16,500
Average expenses on Monthly basis ($2000*12)	-24,000
( Average of $1500 +$ 2500
($1500+$2500)/2== $ 2000
Net Worth Analysis of Slick's Girlfriend	5,61,950

Conclusion – As per above calculation , we noticed that Slick girlfriend has only own Income is $ 16500 yearly from Small Restaurant . Rest of the amount completed sponsored by Steve . So Steve is having good amount of money to pay to the Federal Government . Presently Stiv is paying only $ 400 a month or $ 4800 yearly , which is quite low as compared with his present yearly Net worth . he could have pay > $400 per month OR 10% of his Income