At the end of the month, Sara notices that she has the following balances in...

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Accounting

At the end of the month, Sara notices that she has the following balances in her ledger:

Account

Amount

Cash $300
Checking Account 900
Monthly Car Payment 350
Credit Card Balance 800
Monthly Wage Income 2,000
Certificate of Deposit 3,000
Car 5,800
Other Illiquid Investment Assets 1,600
Monthly Clothing Expense 100
Monthly Food Expense 300
Monthly Interest Expense 30
Car Loan Balance 4,200
Monthly Rent 750
Monthly Interest and Dividend Income 120
Impulse and Miscellaneous Expenses 180
Savings Account 800

1. How rich is Sara? (The liabilities reflect values after current bills have already been paid. Therefore, do not include current expenses as debts.)

A. $8,320
B. $8,200
C. $7,400
D. None of the above

2. What is Sara's liquidity ratio?

A. 0.86
B. 4.67
C. 3.01
D. 1.17

3. Which of the following is the best indicator of Sara"s solvency?

A. 1.72
B. about 50%
C. about 35%
D. 2.48

4.

What was Sara's net gain last month?

A. $460
B. $580
C. $410
D. $320

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