QuestionMary bought a \$30,000 boat with a \$2,000 down payment. What happened to her assets and liabilities? A) Both decreased B) Both increased C) Assets decreased, liabilities increased D) Assets increased, liabilities decreased. Choose the best answer.

Studdy Solution

STEP 1

Assumptions1. Mary has a cash amount of $,000. The cost of the boat is$ 30,0003. Mary is taking a loan to cover the remaining cost of the boat after her down payment4. The loan taken is considered a liability5. The boat purchased is considered an asset

STEP 2

First, we need to calculate the amount of loan Mary needs to take. This can be done by subtracting the down payment from the total cost of the boat.
$Loan\, amount = Total\, cost\, of\, the\, boat - Down\, payment$

STEP 3

Now, plug in the given values for the total cost of the boat and the down payment to calculate the loan amount.
$Loan\, amount = \$30,000 - \$2,000$

STEP 4

Calculate the loan amount.
$Loan\, amount = \$30,000 - \$2,000 = \$28,000$

STEP 5

Now that we have the loan amount, we can analyze the changes in Mary's assets and liabilities.1. By buying the boat, Mary is increasing her assets by $30,000.<br />2. By taking a loan of$ 28,000, Mary is increasing her liabilities by $28,000.

STEP 6

Based on the analysis in5, we can conclude that Mary increased both her assets (by acquiring the boat) and her liabilities (by taking the loan). Therefore, the correct answer isb. Mary increased both assets and liabilities.

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QuestionMary bought a \$30,000 boat with a \$2,000 down payment. What happened to her assets and liabilities? A) Both decreased B) Both increased C) Assets decreased, liabilities increased D) Assets increased, liabilities decreased. Choose the best answer.

Studdy Solution

STEP 1

Assumptions1. Mary has a cash amount of $,000. The cost of the boat is$ 30,0003. Mary is taking a loan to cover the remaining cost of the boat after her down payment4. The loan taken is considered a liability5. The boat purchased is considered an asset

STEP 2

First, we need to calculate the amount of loan Mary needs to take. This can be done by subtracting the down payment from the total cost of the boat.
$Loan\, amount = Total\, cost\, of\, the\, boat - Down\, payment$

STEP 3

Now, plug in the given values for the total cost of the boat and the down payment to calculate the loan amount.
$Loan\, amount = \$30,000 - \$2,000$

STEP 4

Calculate the loan amount.
$Loan\, amount = \$30,000 - \$2,000 = \$28,000$

STEP 5

Now that we have the loan amount, we can analyze the changes in Mary's assets and liabilities.1. By buying the boat, Mary is increasing her assets by $30,000.<br />2. By taking a loan of$ 28,000, Mary is increasing her liabilities by $28,000.

STEP 6

Based on the analysis in5, we can conclude that Mary increased both her assets (by acquiring the boat) and her liabilities (by taking the loan). Therefore, the correct answer isb. Mary increased both assets and liabilities.

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QuestionMary bought a \$30,000 boat with a \$2,000 down payment. What happened to her assets and liabilities? A) Both decreased B) Both increased C) Assets decreased, liabilities increased D) Assets increased, liabilities decreased. Choose the best answer.

Studdy Solution

STEP 1

Assumptions1. Mary has a cash amount of ,000.Thecostoftheboatis,000. The cost of the boat is ,000.Thecostoftheboatis30,0003. Mary is taking a loan to cover the remaining cost of the boat after her down payment4. The loan taken is considered a liability5. The boat purchased is considered an asset

STEP 2

STEP 3

Now, plug in the given values for the total cost of the boat and the down payment to calculate the loan amount.Loan amount=$30,000−$2,000Loan\, amount = \$30,000 - \$2,000Loanamount=$30,000−$2,000

STEP 4

Calculate the loan amount.Loan amount=$30,000−$2,000=$28,000Loan\, amount = \$30,000 - \$2,000 = \$28,000Loanamount=$30,000−$2,000=$28,000

STEP 5

Now that we have the loan amount, we can analyze the changes in Mary's assets and liabilities.1. By buying the boat, Mary is increasing her assets by 30,000.<br/>2.Bytakingaloanof30,000.<br />2. By taking a loan of 30,000.<br/>2.Bytakingaloanof28,000, Mary is increasing her liabilities by $28,000.

STEP 6

Based on the analysis in5, we can conclude that Mary increased both her assets (by acquiring the boat) and her liabilities (by taking the loan). Therefore, the correct answer isb. Mary increased both assets and liabilities.

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Studdy solves anything!

Start learning now

Download Studdy AI Tutor now. Learn with ease and get all help you need to be successful at school.

Assumptions1. Mary has a cash amount of $,000. The cost of the boat is$ 30,0003. Mary is taking a loan to cover the remaining cost of the boat after her down payment4. The loan taken is considered a liability5. The boat purchased is considered an asset

Now, plug in the given values for the total cost of the boat and the down payment to calculate the loan amount.
$Loan\, amount = \$30,000 - \$2,000$

Calculate the loan amount.
$Loan\, amount = \$30,000 - \$2,000 = \$28,000$

Now that we have the loan amount, we can analyze the changes in Mary's assets and liabilities.1. By buying the boat, Mary is increasing her assets by $30,000.<br />2. By taking a loan of$ 28,000, Mary is increasing her liabilities by $28,000.