Jacobs monthly income is $2,800 and his monthly expenses total around $2,000. He has been contemplating how
Question:
Jacob’s monthly income is $2,800 and his monthly expenses total around $2,000. He has been contemplating how to use his about $800 surplus. He has the following financial records:
Cash in his bank account $560
Investment in a mutual fund which he can easily convert to cash $850
Car (valued at) $12,000
Household personal possessions $2,850
Credit card balances $1,250
Miscellaneous short term debts $520
Student loan balance $8,500
Balance on car loan $4,500
Prepare balance sheet for Jacob.
Calculate current ratio, liquidity ratio and debt ratio. Comment on his financial position; does he live within his means?
What do you recommend Jacob to do with his monthly surplus income?
Financial Accounting
ISBN: 978-0078025549
3rd edition
Authors: J. David Spiceland, Wayne Thomas, Don Herrmann