ssignment: Chapter 02 Using Financial Statements and Budgets Balance Sheet Name(s): Andy and Kim Garza Date: December 31, 2012 Assets Liquid Assets Cash $195.75 Checking 215.33 Savings 244.69 Total Liquid Assets: Liabilities and Net Worth Current Liabilities Electric $481.80 Water 206.49 Insurance premiums 344.15 Taxes 1,125.00 Mortgage 833.33 Auto 1,032.44 MasterCard 894.78 5655.77 Investments Retirement funds, IRA Total Investments: $1,440.00 $1,440.00 Real Property Primary residence $162,000.00 Total Current Liabilities: Long-Term Liabilities Primary residence mortgage Total Long-Term Liabilities: $39,999.84 Total Real Property $162,000.00 $11.990.00 Personal Property Honda Pilot Total Personal Property $11,990.00 (1) Total Assets (2) Total Liabilities Net Worth (1)-(2): Total Liabilities and Net Worth: Andy and Kim Garza are both age 44. Using data from the 2012 Federal Reserve Bulletin (shown) and the Garzas' balance sheet, what conclusions can you draw? $260,000 - $240,000 $220,000 - $216,800 $206,700 $200,000 - $180,000 - $179,400 $160,000 $140,000 - Median Net Worth $120,000 - $117.900 $100,000 - $80,000 $60,000 $42.100 $40,000 $20,000 - $9,300 30 Less than 35 35-44 45.54 55-64 65-74 75 or more Age Source: Jessie Bricker et al. "Changes in US. Family Finances from 2007 to 2010: Evidence from the survey of Consumer Finances Federal Reserve Bulletin 90, n t 2012) 17, PH //www.facer abreserve gov/g/Batny2012/art/s/ke Men. ssignment: Chapter 02 Using Financial Statements and Budgets $160,000 $140,000 Median Net Worth $120,000 $117,900 $100,000 580,000 - $60,000 $42,100 $40,000 $20,000 - $9,300 $0 Less than 35 35-44 45-54 65-74 75 or more 55-64 Age Source: Jessie Bricker et al., "Changes in US. Family Finances from 2007 to 2010: Evidence from the Survey of Consumer Finances, Federal Reserve Bulletin 98. no. 2 June 2012): 17. http://www.federalreserve.gov/pubs/Bulletin/2012/articles/s/sc.htm. with their balance sheet in place, Andy and Kim can compare their total liabilities to their total assets to generate a more realistic view of their current wealth position. The Federal Reserve Bulletin provides data on median net worth, broken down by age brackets, Based on the Federal Reserve Bulletin data, the Garzas are the median net worth for their age group . Their would be considered their dominant asset . Based on their liabilities, it appear that they have adequate liquid assets to meet their bill payments and to cover any small, unexpected expenses. Their balance sheet lists their house at 8% higher than the purchase price. The equity in their home is 3