Fatimah and Ahmad, both 30 years old, own a house worth $120,000 and have a year

Question

Fatimah and Ahmad, both 30 years old, own a house worth $120,000 and have a yearly income of $50,000, monetary assets of $15,000, two cars worth $30,000, and furniture worth $10,000. The house has a $100,000 mortgage, they have college loans of $15,000 outstanding, and the cars have outstanding loans of $10,000 each. Bills totaling $2000 for this month have not been paid ($1,000 is to pay off their credit card that they use for bills). They are requesting your help in creating a balance sheet. How would you calculate their net worth? and How are they doing?

Explanation / Answer

They have positive Net worth and cash Flow of $50,000 yearly.

So they are in good position.

Laibilities Amount ($) Assets Amount ($) Mortgage                                   100,000 House                    120,000 Loans College                                     15,000 Monetary Assets                      15,000 Car                                     10,000 Cars                      30,000 Furniture                      10,000 Outstanding Bills                                       2,000 Credit Card                                       1,000                                   128,000                    175,000 Net Worth Total Assets - Total Laibilities $                                 47,000

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