Question

Roberto listed his assets and liabilities on a personal balance sheet. Roberto’s Balance Sheet (September 2013) Assets Liabilities cash $1,800 credit card $4,000 investments $6,200 personal loan $1,000 house $150,000 mortgage $100,000 car $8,000 car loan $5,000 Total Total After creating the balance sheet, Roberto decided to use his investments to pay off his car loan. How will that decision affect the difference between his assets and liabilities? It will make the assets $5,000 less than the liabilities. It will make the assets $5,000 more than the liabilities. The difference between the assets and the liabilities will remain the same. The difference between the assets and the liabilities cannot be compared.

Answer 1

To see the effect on Robertos balance sheet, we will first have to get the total assets and liabilitiesTotal assets = cash+ investment+ house + carTotal liabilities= credit card + personal loan + mortgage  + car loanSubstituting the values, we will getTotal asset =$166000Total liabilities =$1010000Difference= $844000To pay off car loan, he uses his investmentTotal asset = $166000-5000                   =$161000Total liabilities= $1010000-5000                        =$1005000Difference=$844000Therefore the answer is letter C, the difference between asset and liability will remain the same.

Answer 2

Answer:

C is correct

Step-by-step explanation:

The difference between the assets and the liabilities will remain the same.