Question: 1. Using this information and Worksheets 2.1 and 2.2, construct the Lawrences balance sheet and income and expense statement for the year ending December 31,

1. Using this information and Worksheets 2.1 and 2.2, construct the Lawrences’ and income and expense statement for the year ending December 31, 2015.

2. Comment on the Lawrences’ financial condition regarding

(a) Solvency

(b) Liquidity

(d) Ability to pay debts promptly.

If the Lawrences continue to manage their finances as described, what do you expect the long-run consequences to be? Discuss.

3. Critically evaluate the Lawrences’ approach to financial planning. Point out any fallacies in Rob’s arguments, and be sure to mention

a) Implications for the long term, as well as

b) The potential impact of inflation in general and specifically on their net worth.

What procedures should they use to get their financial house in order? Be sure to discuss the role that long- and short-term financial plans and budgets might play.

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Problem 1 Balance Sheet Names Rob Lisa Lawrence DateDecember 31 2015 ASSETS LIABILITIES Liquid assets Current liabilities Cash 85 Bank credit card balances 675 Checking 485 Travel entertainment card b... View full answer

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