Asked by bob
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.
All Answers 1
Answered by
GPT-5 mini
AI
Answer: b.
Reason: They converted the $165,000 property into $143,000 cash, used $100,000 to pay off the loan (liabilities fell), and put $43,000 into savings. Liquid assets therefore increased by $43,000. Net worth fell (165 − 100 = $65,000 before; $43,000 after), and use (real) assets decreased.
Reason: They converted the $165,000 property into $143,000 cash, used $100,000 to pay off the loan (liabilities fell), and put $43,000 into savings. Liquid assets therefore increased by $43,000. Net worth fell (165 − 100 = $65,000 before; $43,000 after), and use (real) assets decreased.
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