The following table shows the assets and liabilities of the Chang family in 2007 and 2008. 2007 2008 home valued at $315,000 home valued at $325,000 mortgage of $265,000 mortgage of $240,000 car valued at $10,000 car valued at $6,000 car loan of $5,000 car loan of $1,000 savings of $2,000 credit card debt of $1,500 Based on the table, which of the following is true? a. From 2007 to 2008, both assets and liabilities decreased. b. From 2007 to 2008, both assets and liabilities increased. c. From 2007 to 2008, assets decreased and liabilities increased. d. From 2007 to 2008, assets increased and liabilities decreased.
Answers
The correct answer for this question would be option D. From 2007 to 2008, assets increased and liabilities decreased.
2007 ;
assets : 350,000 + 10,000 + 2000 = 362,000
liabilities : 265,000 + 5000 = 270,000
2008 :
assets : 325,000 + 6000 = 331,000
liabilities : 240,000 + 1000 + 1500 = 242,500
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Answer:
(d) assets increased and liabilities decreased
Step-by-step explanation:
Assets are the useful or valuable thing that a person owns and liabilities are the state if being responsible for something.
In this question, Home, Car and savings are assets.
While, mortgage, car loan and credit card debts are liabilities as we have to pay them.
By, recording the assets and liabilities, in each of the table, we observe that the
Sum of assets in 2007 = 3,25000
Sum of assets in 2008 = 3,33000
Hence, there is an increase in the assets.
Sum of liabilities in 2007 = 2,71,500
Sum of liabilities in 2008 = 2,41,000
Hence, there is a decrease in the liabilities over 2007 to 2008.
Option (d) is correct as assets are increased while liabilities are decreased.
