Question

Sam and his wife Ann purchased a home in Lubbock, Texas, in 1980 for $100,000. Their original home mortgage payment was $90,000. The house has a current market value of $175,000 and a replacement value of $200,000. They still owe $55,000 of their home mortgage payment. In their current balance sheet, their home will be reflected as: Group of answer choices

Answer 1

Answer:

$175,000 asset and $55,000 liabiliy

Explanation:

The computation is shown below:

In the present balance sheet, the home should considered the following amounts

1. The current market value of the house i.e. $175,000

2. And, the home mortgage payment of $55,000 that we called as the liability

These two amount should be presented on the balance sheet

Hence, the above should be the answer