CENGAGE MINDTAP Assignment: Chapter 02 Using Financial Statements and Budgets Balance Sheet Name(s): Andy and Kim Garza

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CENGAGE MINDTAP Assignment: Chapter 02 Using Financial Statements and Budgets Balance Sheet Name(s): Andy and Kim Garza Date: December 31, 2012 Assets Liquid Assets Cash Checking Savings Total Liquid Assets: Investments Retirement funds, TRA Total Investments: Real Property Primary residence Total Real Property: Personal Property Honda Pilot Total Personal Property: $195.75 215.33 244.69 $1,440.00 $162,000.00 $11,990.00 (1) Total Assets: $655.77 $1,440.00 $162,000.00 $11.990.00 $176,085.770 Liabilities and Net Worth Current Liabilities Electric Water Insurance premiums Taxe Mortgage Auto MasterCard Total Current Liabilities: Long-Term Liabilities. Primary residence mortgage Total Long-Term Liabilities: $481.80 206.49 344.15 1,125.00 833.33 1,032.44 894.78 $39,999.84 (2) Total Liabilities: Net Worth (1)-(2): Total Liabilities and Net Worth: S $131,167 940) $17,608 770
It isn't just the preparation of a balance sheet but the interpretation of the data that can reveal a family's financial condition. 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- $160,000- $140,000 $120,000- $100,000- $80,000- $60,000- $42,100 $40,000- $20,000- $9,300 $0 Less than 35 35-44 45-54 55-64 65-74 75 or more 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/Bull ... cf/sdf.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. Median Net Worth $117,900 $179,400
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. the median net worth for their age group. Based on the Federal Reserve Bulletin data, the Garzas are above Their home would be considered their dominant asset. Based on their liabilities, it does not 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 S