Question

Jordan has the following assets and liabilities:-Two Cars $10,000-House $200,000-Mortgage $100,000-Cash $1,000-Car Loans $3,000-Checking Account Bal. $2,000 -Credit Card Bal. $1,000Jordan's wealth is _____, the value of Jordan's assets is _____, and the value of Jordan's liability is _____.A. $107,000; $213,000; $100,000B. $109,000; $213,000; $104,000C. $111,000; $213,000; $100,000D. $213,000; $317,000; $104,000

Answer 1

Answer:

The correct option is B. $109,000; $213,000; $104,000

Explanation:

For computing the wealth, first, we have to compute the assets and liabilities value

So, the assets = Cars + House + cash + checking account balance

                 = $10,000 + $200,000 + $1,000 + $2,000

                 = $213,000

So, the liabilities = Mortgage + car loans + credit card balance

                     = $100,000 + $3,000 + $1,000

                     = $104,000

we apply the accounting equation which equals to

Assets = Liabilities + shareholder equity

And, the wealth equal to

= Assets - Liabilities

= $213,000 - $104,000

= $109,000

Hence, Jordan's wealth is $109,000, the value of Jordan's assets is $213,000, and the value of Jordan's liability is $104,000.

Therefore, the correct option is B. $109,000; $213,000; $104,000