Question

a. Corey has a mountain bike worth $350, a credit card debt of $200, $210 in cash, a Sandy Koufax baseball card worth $500, $1,250 in a checking account, and an electric bill due for $300. Construct Corey’s balance sheet and calculate his net worth. For each remaining part, explain how the event affects Corey’s assets, liabilities, and wealth.

Instructions: Enter your responses as integer values. Do not leave cells blank. You must enter an answer in order to be graded correctly.

Assets		Liabilities
(Click to select)Electric billBaseball cardCredit card billMountain bike	$	(Click to select)CashMountain bikeBaseball cardCredit card bill	$
(Click to select)Credit card billMountain bikeCashElectric bill	$	(Click to select)Mountain bikeBaseball cardElectric billChecking account	$
(Click to select)Baseball cardCredit card billElectric billMountain bike	$
(Click to select)Checking accountCashCredit card billElectric bill	$
Total	$		$

Corey's net worth: $.

b. Corey goes to a baseball card convention and finds out that his baseball card is a worthless forgery.
    
Instructions: Enter your responses as integer values.

Assets (Click to select)increasedeclineremain unchanged and equal $.

Liabilities (Click to select)increasedeclineremain unchanged and equal $.

Wealth (Click to select)remains unchangeddeclinesincreases and equals $.


c. Corey uses $200 from his paycheck to pay off his credit card balance. The remainder of his paycheck is spent in a way that does not impact his balance sheet.

Instructions: Enter your responses as integer values.

Assets (Click to select)remain unchangeddeclineincrease and equal $.

Liabilities (Click to select)declineremain unchangedincrease and equal $.

Wealth (Click to select)increasesdeclinesremains unchanged and equals $.


d. Corey writes a $200 check on his checking account to pay off his credit card balance.

Instructions: Enter your responses as integer values.

Assets (Click to select)remain unchangedincreasedecline and equal $.

Liabilities (Click to select)increasedeclineremain unchanged and equal $.

Wealth (Click to select)declinesincreasesremains unchanged and equals $.


Of the events in the previous three parts, which, if any, corresponds to saving on Corey’s part?

Part (Click to select)cbd corresponds to saving.

Answer 1

a). Solution :-   Balance sheet

Assets	Amount ($)	Liabilities	Amount ($)
Mountain bike Cash Base ball card Checking account	350 210 500 1250	Credit card debt Outstanding electric bill	200 300
Total	2310	Total	500

Net worth = 2310 - 500

= $ 1810.

Conclusion :- Net worth = $ 1810.

b). Answer :- i). Assets decline and equals $ 1810 (2310 - 500).

ii). Liabilities remain unchanged and equals $ 500.

iii). Wealth declines and equals $ 1310 (1810 - 500).

c). Answer :- i). Assets remain unchanged and equals $ 2310.

ii). Liabilities decline and equals $ 300 (500 - 200).

iii). Wealth increases and equals $ 2010 (2310 - 300).

d). Answer :- i). Assets decline and equals $ 2110 (2310 - 200).

ii). Liabilities decline and equal $ 300 (500 - 200).

iii). Wealth remains unchanged and equal $ 1810 (2110 - 300).

e). Answer :- "Corey uses $200 from his paycheck to pay off his credit card balance" corresponding to savings on part of Corey.