Homework 2

 Answer the following questions:

Calculating Balance Sheet Amounts. Based on the following data, compute the total assets, total liabilities, and net worth.
Liquid assets $4,670                                                                  Household assets $93,780
Investment assets 26,910                                                          Long-term liabilities 76,230
Current liabilities 2,670

 
Preparing a personal Balance Sheet. Use the following items to  prepare a balance sheet and a cash flow statement. Determine the total  assets, total liabilities, net worth, total cash inflows, and total cash  outflows.
Rent for the month, $650
Monthly take-home salary, $1,950
Cash in checking account, $450
Savings account balance, $1,890
Spending for food, $345
Balance of educational loan, $2,160
Current value of automobile, $7,800
Telephone bill paid for month, $65
Credit card balance, $235
Loan payment, $80
Auto insurance, $230
Household possessions, $3,400
Stereo equipment, $2,350
Payment for electricity, $90
Lunches/parking at work, $180
Donations, $70
Home computer, $1,500
Value of stock investment, $860
Clothing purchase, $110
Restaurant spending, $130
 
Calculating Financial Ratios. The Fram family has liabilities of  $128,000 and a net worth of $340,000. What is their debt ratio? How  would you assess this?

 
Determining Budget Variances. Fran Bowen created the following budget:
Food, $350
Clothing, $100
Transportation, $320
Personal expenses and recreation, $275
Housing, $950

She  actually spent $298 for food, $337 for transportation, $982 for  housing, $134 for clothing, and $231 for personal expenses and  recreation. Calculate the variance for each of these categories, and  indicate whether it was a deficit or surplus.
 
Future Value of Savings. Kara George received a $4,000 gift for  graduation from her uncle. If she deposits the entire amount in an  account paying 3 percent, what will be the value of this gift in 15  years?