In order to reduce their debt, the Johnsons sold some real estate property valued at $165,000 for $143,000. They paid off a loan balance of $100,000 and put the rest in savings. Which of the following is a true statement?

a.

The Johnsons increased their liabilities.

b.

The Johnsons increased their liquid assets.

c.

The Johnsons increased their net worth.

d.

The Johnsons increased their use assets.

Question

Perla

Mathematics

11 January, 05:58

In order to reduce their debt, the Johnsons sold some real estate property valued at $165,000 for $143,000. They paid off a loan balance of $100,000 and put the rest in savings. Which of the following is a true statement?

a.

The Johnsons increased their liabilities.

b.

The Johnsons increased their liquid assets.

c.

The Johnsons increased their net worth.

d.

The Johnsons increased their use assets.

+5

Answers (1)

Know the Answer?

Francesca Shea · Answer 1

The question is giving us the following scenario: "In order to reduce their debt, the Johnsons sold some real estate property valued at $165,000 for $143,000. They paid off a loan balance of $100,000 and put the rest in savings." We can see that they actually lost money - they got for the house less than the house is worth - they decreased their net value. But they have more cash that they can use (the savings) - this is called liquid assets - so the correct answer is b The Johnsons increased their liquid assets.