Question

Using the following balance sheet items and amounts, calculate the total liquid assets and total current...

Using the following balance sheet items and amounts, calculate the total liquid assets and total current liabilities:

Money market account $ 3,450 Medical bills $ 398
Mortgage $ 154,000 Checking account $ 950
Retirement account $ 94,200 Credit card balance $ 659


a.Total liquid assetsb.=

b.Total current liabilities=

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Answer #1

Answer :

(a.) Calculation of Liquid Assets

Liquid Assets = Money Market Account + Checking Account

= 3,450 + 950

= 4,400

Liquid assets are those assets which can be easily converted into cash and cash equivalents . Money Market Account and Checking account are classified as Liquid Assets.

(b.) Calculation of Total Current Liabilities

Total Current Liabilities = Medical Bills + Credit card Balance

= 398 + 659

= 1,057

Current liabilities are those liabilities which are payable within one year. Medical Bills and credit card balances are classified as Current Liabilities.

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