PFIN (with PFIN Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
6th Edition
ISBN: 9781337117005
Author: Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher: Cengage Learning
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Question
Chapter 2, Problem 2FPE
Summary Introduction
To prepare: The
A personal balance sheet provides a snapshot of an individual’s wealth for a particular period of time. It shows the assets and liabilities and the net worth of an individual.
a)
Summary Introduction
To evaluate: The solvency ratio.
b)
Summary Introduction
To evaluate: The liquidity ratio.
c)
Summary Introduction
To evaluate: The equity in person EC’s dominant assets.
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Preparing personal balance sheet
Use Worksheet 2.1. Sadie Richardson’s banker has asked her to submit a personal balance sheet as of June 30, 2020, in support of an application for a $3,000 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:
Cash on hand
$ 70
Balance in checking account
180
Balance in money market deposit account with
Southwest Savings
690
Bills outstanding:
Telephone
$ 20
Electricity
70
Charge account balance
190
Visa
180
MasterCard
220
Taxes
400
Insurance
220
1,300
Condo and property
69,000
Condo mortgage loan
54,000
Automobile: 2015 Honda Civic
12,000
Installment loan balances:
Auto loans
3,000
Furniture loan
500
3,500
Personal property:
Furniture
1,050
Clothing
900
1,950
Investments:…
Personal Financial Statement Project
For the Personal Financial Statement Project:
1. Record the events on the next page in the accompanying
formula worksheet
2. Write out the journal entries for the events on the next page
3. Create the financial statements with the ending information
from the worksheet
4. Once you have your Financial Statements completed,
please make a comment or two in the online text input box
about what the information is telling you
Event List
1. Opened a bank account with previously earned (retained
earnings) money for $100,000
2. Bought a house by paying $75,000 down in cash and taking a
loan of $225,000
3. Bought a vehicle by paying $1,000 down in cash and taking a
loan of $44,000
4. Worked (performed services) to clients for $80,000 cash
5. Paid for materials used (expense) in the services performed
with cash for $50,000
6. Paid for repairs and utilities of the house and vehicle (just
regular expenses) with cash for $8,500
7. During the year, you paid $5,000…
As at 31 December 2019 Jenny had a bank loan of $4.500 and a balance of $1,400 in her bank acCount.
How should these amounts be recorded on Jenny's opening trial balance at 1 January 2020?
Select one:
a. Debit $1,400 and Credit $4,500
b. Debit $4,500 and Credit $1,400
c. Credit $5,900
d. Debit $5.900
Chapter 2 Solutions
PFIN (with PFIN Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
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