Question

Shelly’s assets include money in checking and savings accounts, investments in stocks and mutual funds, and personal property, including furniture, appliances, an automobile, a coin collection, and jewelry. Shelly calculates that her total assets are $108,800. Her current unpaid bills, including an auto loan, credit card balances, and taxes total $16,300. Calculate Shelly’s net worth.

Answer 1

Answer:

The net worth is $92,500

Explanation:

In this question, we apply the accounting equation which is shown below:

Total assets = Total liabilities + shareholder's equity

$108,800 = $16,300 + shareholder's equity

So, the shareholder equity or net worth equal to

= $108,800 - $16,300

= $92,500

These are the items of the balance sheet. By using the accounting equation, the total debit and the total credit side of the balance sheet items should always be balanced and equal.