Consider the information below for an individual: Home valued at $250,000 . Mortgage balance of $150,000 Auto worth $25,000 $15,000 auto loan. . New household furnishings valued at $5,000 . . $4.500 loan for furniture Retirement account of $45,000 . $1,500 in emergency savings $500 in checking $1500 in a CD . $15,000 credit cards balances . $500 per month for student loans; current balance is $25,000 . $100 per month gym membership Using the information above, respond to all of the following: 1. Determine this individual's net worth. Explain. 2. Identify any expenses that are not liabilities. 3. Assume this individual decides to create a budget. What are the two components of a budget? . I

Consider the information below for an individual: Home valued at $250,000 . Mortgage balance of $150,000 Auto worth $25,000 $15,000 auto loan. . New household furnishings valued at $5,000 . . $4.500 loan for furniture Retirement account of $45,000 . $1,500 in emergency savings $500 in checking $1500 in a CD . $15,000 credit cards balances . $500 per month for student loans; current balance is $25,000 . $100 per month gym membership Using the information above, respond to all of the following: 1. Determine this individual's net worth. Explain. 2. Identify any expenses that are not liabilities. 3. Assume this individual decides to create a budget. What are the two components of a budget? . I

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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Question

100%

Consider the information below for an individual:
Home valued at $250,000
.
Mortgage balance of $150,000
. Auto worth $25,000
$15,000 auto loan
New household furnishings valued at $5,000
$4.500 loan for furniture
■
. Retirement account of $45,000
$1,500 in emergency savings
■
$500 in checking
$1500 in a CD
$15,000 credit cards balances
.
$500 per month for student loans; current balance is $25,000
. $100 per month gym membership
Using the information above, respond to all of the following:
1. Determine this individual's net worth. Explain.
2. Identify any expenses that are not liabilities.
3. Assume this individual decides to create a budget. What are the two components of a budget?
4. Assume this individual's friend decides to pursue postsecondary education. What are two types of financial aid that the
friend could apply for that do not have to be repaid?
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Jennifer Pontesso, from Lincoln, Nebraska, wants to better understand her financial situation. Use the following balance sheet and cash flow statement information to determine her net worth and her net surplus for a recent month. Liquid assets: $9,000; home value: $230,000; monthly mortgage payment: $1,350 on $170,000 mortgage; investment assets: $70,000; personal property: $22,000; total assets: $331,000; short-term debt: $3,240 ($270 a month); total debt: $173,240; monthly gross income: $10,000; monthly disposable income: $6,500; monthly expenses: $5,500. Round your answers to the nearest dollar.