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1. Discuss in general terms how Morgantown Savings Bank should account for and r

ID: 2423446 • Letter: 1

Question

1. Discuss in general terms how Morgantown Savings Bank should account for and report its portfolio of short-term, fixed-income mutual funds.

2. Discuss whether you agree with Morgantown’s accounting and reporting for its portfolio of short-term, fixed-income mutual funds for the period December 31,20X3, through September 31, 20X4. Include in your discussion Morgantown’s proposal to determine impairment of the portfolio at December 31,20X6.

3. How would you recommend that Morgantown’s account for and report its short-term, fixed-income mutual funds as of December 31, 20X3, and throughout 20X4, including December 31, 20X4? Include in your response the basis for your recommendation.

Explanation / Answer

11. Gross Income=60000

Living Expenses= 60000*75%=45000

Balance= 15000

Therefore he should set aside $ 5000-10000 for emergencies

12. The correct answer is C

The benefit of savings account is not the protection against inflation.

13. The correct answer is C

Stock brokers offers certificates of deposits

14.The correct answer is A

He will be responsible for the full amount i.e. $ 600 as only he is responsible for the lost of the ATM

15. The correct answer is A

It is called as the Cashiers cheque

19. The correct answer is C

i.e. $ 250000

20. The correct answer is D

We can get money order in local post offices