Question

The Svensons find a refrigerator valued at $2,300 on sale for $1,900. They decided to withdraw $500 from savings to use as a down payment on the purchase of the refrigerator and took out a loan to pay the balance. Choose the true statement.
a.
The Svensons’ assets increased by $1,400.
b.
The Svensons’ assets increased by $1,800.
c.
The Svensons’ assets increased by $1,900.
d.
The Svensons’ assets increased by $2,300.

Answer 1

To determine how the Svensons' assets changed with the purchase of the refrigerator, we start by analyzing the situation:

1. **Value of the refrigerator**: $2,300
2. **Sale price of the refrigerator**: $1,900
3. **Down payment from savings**: $500
4. **Loan taken to cover the balance**: $1,400 (since $1,900 - $500 = $1,400)

Now, we can assess how their assets change:

- The refrigerator is an asset worth $2,300.
- They withdrew $500 from savings, but they used it as a down payment, indicating they still possess it as an asset in the form of the refrigerator.
- The loan essentially adds a liability but does not detract from the value of the refrigerator itself.

Thus, when the Svensons acquire the refrigerator, their total assets go up by the full value of the refrigerator, which is $2,300.

Therefore, the true statement is:

**d. The Svensons’ assets increased by $2,300.**