Question

Below are some of the accounts that Company F has on their books:

Cash and Cash Equivalents $2,000
Insurance Expense $250
Accounts Payable $800
Prepaid Rent $400
Accounts Receivable $750
Deferred Revenue $1,650
Inventory $925

Which of the amounts below is the correct total of assets?

Answer 1

To calculate the bank's net worth, you subtract its total liabilities from its total assets. With reserves of $50, government bonds of $70, and loans of $500, the assets total $620. Subtracting the deposits of $400, the net worth is $220.

Step-by-step explanation:

You asked how to set up a T-account balance sheet for a bank and calculate its net worth. Here's how you can do that: Assets include reserves, bonds, and loans given out by the bank. Liabilities represent the deposits the bank owes to its customers. Equity, or net worth, is what remains after liabilities are subtracted from assets. Using the figures you provided, let's set up the T-account: Assets: Reserves: $50; government bonds: $70; loans: $500. Liabilities + Net Worth: Deposits: $400, Net Worth: Calculation is to be done.

To calculate the net worth, you subtract total liabilities from total assets: Net Worth = Assets minus Liabilities = ($50 + $70 + $500) - $400 = $620 - $400 = $220 Therefore, the bank's net worth is $220. To calculate the total assets for Company F, we need to add up the values of all the accounts listed. The accounts that represent assets are cash and cash equivalents, prepaid rent, accounts receivable, and inventory. These accounts have values of $2,000, $400, $750, and $925, respectively. Adding these amounts together, we get a total of $4,075 for the assets of Company F.