Preparing personal balance sheet. Use Worksheet 2.1. Katie Wright’s banker has asked her to submit a personal balance sheet as of June 30, 2020, in support of an application for a $6,000 home improvement loan. She comes to you for help in preparing it. So far, she has made the following list of her assets and liabilities as of June 30, 2020:

From the data given, prepare Katie Wright’s balance sheet, dated June 30, 2020 (follow the balance sheet form shown in Worksheet 2.1). Then evaluate her balance sheet relative to the following factors:

(a) solvency,

(b) liquidity, and

(c) equity in her dominant asset.P-58

Transcribed Image Text:

Cash on hand Asset/Liability $70 Sub-total Balance in checking account 180 Balance in money market deposit account with 650 900 Central Savings Bills outstanding: Telephone Electricity Charge account balance Visa MasterCard Taxes Insurance Condo and property Condo mortgage loan Automobile: 2016 Honda Civic Installment loan balances: Auto loans Furniture loan $20 70 190 180 220 400 220 $1,300 68,000 52,000 14,400 3,000 500 3,500 Personal property: Furniture Clothing 1,050 900 1,950