Question

The assets and liabilities of a smoothie shop are listed below: Owned inventory: 42,970, Cash:229,682, Long-term liabilities: 56,000, Building mortgage:110,650, Savings account: 135,327, Owned equipment:34,823, Accounts receivable: 10,265, Small business loan:52,495, Property value: 186,987, Other debt:25,789, Long-term investments: 125,000. If the smoothie shop owner adds25,000 to the small business loan to cover unexpected equipment repairs, what will be the total net worth?

1) 495,120
2) 520,120
3) 545,120
4) 765,054

Answer 1

The total net worth of the smoothie shop after adding $25,000 to the small business loan will remain $383,793.

Step-by-step explanation:

Net Worth Calculation:

To calculate the net worth of the smoothie shop after adding $25,000 to the small business loan, we need to find the total assets and total liabilities before and after the change.

Before Change:

• 
  
• Total Assets = Owned inventory + Cash + Owned equipment + Accounts receivable + Property value + Long-term investments = $42,970 + $229,682 + $34,823 + $10,265 + $186,987 + $125,000 = $629,727
• 
  
• Total Liabilities = Long-term liabilities + Building mortgage + Small business loan + Other debt = $56,000 + $110,650 + $52,495 + $25,789 = $245,934
• 
  
• Net Worth = Total Assets - Total Liabilities = $629,727 - $245,934 = $383,793

After Change:

• 
  
• Total Assets = $629,727 + $25,000 = $654,727
• 
  
• Total Liabilities = $245,934 + $25,000 = $270,934
• 
  
• Net Worth = Total Assets - Total Liabilities = $654,727 - $270,934 = $383,793

The total net worth of the smoothie shop after adding $25,000 to the small business loan will remain $383,793.