Balance sheet preparation
Adam and Arin Adams have collected their personal asset and liability information and asked you to put together a balance sheet as of December 31,2015. The following information is received from the Adams family.
Cash $300 Retirement funds, IRA $2,000
Checking 3,000 2014 Sebring 15,000
Savings 1,200 2010 Jeep 8,000
IBM stock 2,000 Money market funds 1,200
Auto loan 8,000 Jewelry and artwork 3,000
Mortgage 100,000 Net worth 76,500
Medical bills payable 250 Household furnishings 4,200
Utility bills payable 150 Credit card balance 2,000
Real estate 150,000 Personal loan 3,000
a. Create a personal balance sheet as of December 31, 2015. It should be similar to a corporate balance to a corporate balance sheet.
b. What must the total assets of the Adams family be equal to by December 31, 2015?
c. What was their net working capital (NWC) for the year? (Hint: NWC is the difference between total liquid assets and total current liabilities.)