Use the following financial information about Danni Flinn: she earns $625 in wag

ID: 2771764 • Letter: U

Question

Use the following financial information about Danni Flinn:

she earns $625 in wages from her job at the bookstore every 2 weeks

her parents give her $400 every month

she averages $75 in income each month by dog-sitting

she has $800 in her savings account

she has $350 in her checking account

she has a car worth about $3,500

she rents an apartment with roommates, her portion of the rent is $420 every month

she deposits $100 every month into her savings account

her utilties and cell phone expenses run her about $250 per month

she spends about $85/week on food

she allows herself $40/week for entertainment

her car payment is $165/month

her car insurance is $300 every 6 months

the balance on her car loan is $1,250

the balance on her credit card is $545 and she makes $50 payments monthly to the company for the balance on this account

she has an outstanding balance for medical expenses of $385 and she makes $25 payments monthly to the medical office owed

1. Danni's current assets are?

2. Danni's current liabilities are?

3. Danni's current net worth is?

4. According to the Basic Liquidity Ratio, if Danni lost her income, she could maintain her current spending for how many months?

Danni's current assets = $800 in her savings account + $350 in her checking account = $ 1150

Danni's current liabilities = car payment of $165/month + $50 payments for credit card + $25 payments monthly to the medical office owed = $ 240

Danni's current net worth is = Danni's current assets of $ 1150 + car worth $3,500 -

balance on her car loan $1,250 - balance on her credit card $545 -outstanding balance for medical expenses of $385

= $ 2470

Basic Liquidity Ratio =Monetary Assets(current asset)/Monthly Expenses

Monthly expenses = Danni's current liabilities of $240 + rent $420 + utilties and cell phone expenses of $250 +

$85 * 4 on food + $40 * 4 for entertainment + car insurance of $300/6 = $1,460

Basic Liquidity Ratio =Monetary Assets(current asset)/Monthly Expenses = 1150/1460 = 0.787 months

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