Suppose that David's only assets are an automobile worth $10,000 and a checking account with a $5,000 balance.His only liabilities are a student loan balance of $12,000 and a balance of $9,000 on his car loan.What is his net worth?
A)$21,000
B)$15,000
C)$6,000
D)Doug is currently insolvent with $6,000 negative net worth.
E)None of the above statements are correct.

Question

Quizplus · Accepted Answer

David's total assets are the sum of his automobile worth ($10,000) and his checking account balance ($5,000), which equals $15,000. His total liabilities are the sum of his student loan balance ($12,000) and his car loan balance ($9,000), which equals $21,000. Subtracting his total liabilities from his total assets ($15,000 - $21,000) results in a negative $6,000, indicating that David is insolvent with a net worth of negative $6,000.

Suppose That David's Only Assets Are an Automobile Worth $10,000