Question 1190345: Use the following balance sheet and cash flow information to determine the net worth and net surplus for an individual in a recent month:
Liquid Assets $15,000
Home Value $220,000
Investment assets: $120,000
Personal Property $30,000
Total assets: $385,000
Short Term Debt: $7000 ($250 a month)
Monthly Mortgage Payment $1400 on a $180,000 mortgage
Total Debt: $187,000
Monthly Gross Income: $11,000
Monthly Disposable Income $ 4000
Monthly Expenses: $7000
Networth would be $198,000
I subtracted assets from liabilities to get net worth.
I'm not sure how to figure out net worth
I thought id subratct 11,000 from 7,000 and get 4000 but that doesn't seem right
Answer by math_tutor2020(3817)   (Show Source):
You can put this solution on YOUR website!
net worth = (total assets) - (total liabilities)
net worth = $385,000 - $187,000
net worth = $198,000
There's no need to involve the other numbers because they are built into the totals mentioned.
The $11,000 monthly gross income and the $4000 disposable income combine to $15,000 which is the amount of liquid assets. The liquid assets are part of the total assets.
The $7000 in monthly expenses would be the short term debt, and that is part of the total liabilities (i.e. debt).
|
|
|
