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8 March, 17:55

Roberto listed his assets and liabilities on a personal balance sheet.

Roberto's balance sheet (September 2013)

Cash $1,800 credit card $4,000

Investments $6,200 personal loan $1,000

House $150,000 mortgage $1000,000

Car $8,000 car loan $5,000

Total. Total.

After creating the balance sheet, Roberto decided to use his investmente to pay off his car loan. how will that decision affect you the difference between his assets and liabilities?

A. it will make the assets $5,000 less than the liabilities.

B. it will make the assets $5,000 more than the liabilities.

C. the difference between the assets and the liabilities will remain the same.

Do. the difference between the assets and the liabilities cannot be compared

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Answers (1)
  1. 8 March, 21:20
    0
    To see the effect on Robertos balance sheet, we will first have to get the total assets and liabilities

    Total assets = cash + investment + house + car

    Total liabilities = credit card + personal loan + mortgage + car loan

    Substituting the values, we will get

    Total asset = $166000

    Total liabilities = $1010000

    Difference = $844000

    To pay off car loan, he uses his investment

    Total asset = $166000-5000

    =$161000

    Total liabilities = $1010000-5000

    =$1005000

    Difference=$844000

    Therefore the answer is letter C, the difference between asset and liability will remain the same.
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