You have a current balance sheet with liabilities of $50,000 and assets of $75,000.You estimate that you will have to purchase a new vehicle next year for $20,000.You believe you will be able to pay 20% down and can finance the remainder through your bank.If nothing else changes,your pro forma balance sheet will show assets of and liabilities of .
A)$95,000;$66,000
B)$91,000;$54,000
C)$95,000;$70,000
D)$91,000;$66,000

Question

Quizplus · Accepted Answer

The new vehicle will increase assets by $20,000, making total assets $95,000. Paying 20% down ($4,000) reduces cash, and financing $16,000 increases liabilities to $66,000.

You Have a Current Balance Sheet with Liabilities of $50,000