The following is a partial balance sheet for Kevin and Trisha Soloman. Complete the balance sheet by determining their total assets, total current liabilities, long-term liabilities, and net worth. Balance Sheet Name(s): Kevin and Trisha Soloman Assets Date: December 31, 2012 Liabilities and Net Worth Liquid Assets Cash Checking Savings Total Liquid Assets: $246.45 271.10 308.06 $350.18 150.08 250.13 $825.61 Current Liabilities Electric Water Insurance premiums Taxes Mortgage Auto MasterCard Total Current Liabilities: Long-Term Liabilities Primary residence mortgage Total Long-Term Liabilities: 1,087.50 805.56 750.38 650.33 $1,314.38 Investments Retirement funds, IRA $1,314.38 Total Investments: Real Property Primary residence $156,600.00 Total Real Property: Personal Property Honda Pilot $11,495.00 Total Personal Property: (1) Total Assets: 11 $38,666.88 $156,600.00 $11,495.00 (2) Total Liabilities: Net Worth (1) - (2): Total Liabilities and Net Worth: Based on the completed balance sheet, the Solomans' net worth is It isn't just the preparation of a balance sheet but the interpretation of the data that can reveal a family's financial condition. Kevin and Trisha Soloman are both age 44. Using the latest data from the 2012 Federal Reserve Bulletin (shown) and the Solomans' 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 $0 Less than 35 35-44 45-54 65-74 75 or more 55-64 Age Source: Jessie Bricker et al., "Changes in U.S. 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/sch/scf.htm. With their balance sheet in place, Kevin and Trisha 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 Solomans are the median net worth for their age group. Their would be considered their dominant asset. appear that they have adequate liquid assets to meet their bill payments and to cover any small, Based on their liabilities, it unexpected expenses. Their balance sheet lists their house at 8% higher than the purchase price. The equity in their home is
