Katie Wright’s banker has asked her to submit a personal balance sheet as of June 30, 2020, in support of an application for a $6,000 home improvement loan. She comes to you for help in preparing it. So far, she has made the following list of her assets and liabilities as of June 30, 2020: Asset/LiabilitySub-totalCash on hand$70Balance in checking account180Balance in money market deposit account withCentral Savings650900Bills outstanding:Telephone$20Electricity70Charge account balance190Visa180MasterCard220Тахes400Insurance220$1,300Condo and property68,000Condo mortgage loan52,000Automobile: 2016 Honda Civic14,400Installment loan balances:Auto loans3,000Furniture loan5003,500Personal property:Furniture1,050Clothing9001,950 Asset/LiabilitySub-totalInvestments:US. government savings bonds500Apple stock3,0003,500From the data given, prepare Katie Wright's balance sheet, dated June 30, 2020 (follow thebalance sheet form shown in Worksheet 2.1). Then evaluate her balance sheet relative to thefollowing factors: (a) solvency, (b) liquidity, and (c) equity in her dominant asset.

1. Determination of balance sheet Katie Wright's Balance sheet Ended June 30, 2020 Assets $…

Answered: Asset/Liability Sub-total Cash on hand…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Katie Wright’s banker has asked her to submit a personal balance sheet as of June 30, 2020, in support of an application for a $6,000 home improvement loan. She comes to you for help in preparing it. So far, she has made the following list of her assets and liabilities as of June 30, 2020:

Asset/Liability
Sub-total
Cash on hand
$70
Balance in checking account
180
Balance in money market deposit account with
Central Savings
650
900
Bills outstanding:
Telephone
$20
Electricity
70
Charge account balance
190
Visa
180
MasterCard
220
Тахes
400
Insurance
220
$1,300
Condo and property
68,000
Condo mortgage loan
52,000
Automobile: 2016 Honda Civic
14,400
Installment loan balances:
Auto loans
3,000
Furniture loan
500
3,500
Personal property:
Furniture
1,050
Clothing
900
1,950

Asset/Liability
Sub-total
Investments:
US. government savings bonds
500
Apple stock
3,000
3,500
From the data given, prepare Katie Wright's balance sheet, dated June 30, 2020 (follow the
balance sheet form shown in Worksheet 2.1). Then evaluate her balance sheet relative to the
following factors: (a) solvency, (b) liquidity, and (c) equity in her dominant asset.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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