Question

The assets and liabilities of a veterinarian are listed below. What is the value of the veterinarian's liquid assets?

a. $34,417
b. $44,186
c. $78,603
d. $98,820

Answer 1

To determine the net worth of the bank, we set up a T-account balance sheet, calculated the total assets ($620), and subtracted the total liabilities ($400), resulting in a net worth of $220.

Step-by-step explanation:

The question requires setting up a T-account balance sheet for a bank, and then calculating the bank's net worth. Let's start by organizing the bank's assets and liabilities:

• Assets:
  
  • Reserves: $50
  • Government Bonds: $70
  • Loans: $500
• Liabilities:
  
  • Deposits: $400

To find the net worth, we subtract the total liabilities from the total assets:

Total Assets = Reserves + Government Bonds + Loans = $50 + $70 + $500 = $620

Total Liabilities = Deposits = $400

Net Worth = Total Assets - Total Liabilities = $620 - $400 = $220

Therefore, the bank's net worth is $220.