# Fin580 Midterm

1613 words 7 pages
Grade Details - All Questions Question 1. Question :

(TCO A) Jean and Jim have liquid assets of \$3,600 and other assets of \$42,800. Their total liabilities equal \$26,000. What is their net worth? (Show all work.)
Total Assets \$46,400 Less: Total Liabilities 26,000 Equal: Net Worth \$20,400 Liquidity: \$3,600 +Other Assets: \$42,800 Total Assets: \$46,400 -Total liabilities: \$26,000 Net Worth: \$20,400

Instructor Explanation:

Total Assets \$46,400 Less: Total Liabilities 26,000 Equal: Net Worth \$20,400

10 of 10

Question 2. Question :

(TCO A) Construct a balance sheet from the following information. Be sure the format is correct. (Show all work.) Cash on hand 1,000 Bank credit
Question :

(TCO B) Mary has the following expenses that she wants to include as itemized deductions for the year. Her adjusted gross income is \$80,000. What is the total itemized deduction she can take? (Show all work.) Medical expenses Home mortgage interest Credit card interest Charitable contributions State property taxes Job-related expenses \$4,500 8,000 450 1,500 2,400 1,900

Adjusted gross income is \$80,000 Medical expenses \$4,500.00 \$6,000.00 \$- Must be 7.5% of gross Home mortgage interest \$8,000.00 \$8,000.00 Deductable Credit card interest \$450.00 \$- Not Deductable Charitable contributions \$1,500.00 \$1,500.00 Deductable State property taxes \$2,400.00 \$2,400.00 Deductable Job-related expenses \$1,900.00 \$1,600.00 \$300.00 Deductable - meets the 2% of gross minimum in excess of \$1600 \$12,200.00 Total Deductions

Instructor Explanation:

Medical expenses \$0 {\$4,500 - (.075 x \$80,000)} Home mortgage interest 8,000 Credit card interest (not allowed) Charitable contributions 1,500 State property tax 2,400 Job-related expenses 300 {\$1,900

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