Hannah and Aysha are school friends of yours at Vanier High School The two happen to...

 

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Hannah and Aysha are school friends of yours at Vanier High School The two happen to be discussing their personal fortunes at the moment. Hannah is fo rich because she has $2 000 in a personal bank account. A distant aunt who recently left her the money. Aysha feels pretty well off, too. She has less money but she does have so valuable possessions, including fashionable clothes and jewellery, as well as S shares that were left to her by her grandmother. For reasons that she ca explain, she feels that she is just as well off as Hannah. You get into the conversation at lunch break. You suggest to the two girls thi they each prepare a personal balance sheet. You explain how to go about it and hoy to estimate the value of non-cash items. The balance sheets, you say, will show wha is better off financially. The girls prepare their balance sheets according to your directions and come with the following: HANNAH'S BALANCE SHEET SEPTEMBER 30, 20- AYSHA'S BALANCE SHEET SEPTEMBER 30, 20- Assets Assets $ 10 $2 000 I 500 Bank Balance Bank Balance Clothes CD Player Jewellery IBM Shares 500 1 000 I 100 I 200 Total Assets $3 500 Clothes Total Assets $3 810 Liabilities and Equity Debts Owing Hannah's Capital Liabilities and Equity Debts Owing Aysha's Capital nil $3 500 Total Liabilities and Equity $3 500 $ 200 3 610 Total Liabilities and Equity $3810 When the two girls get together to compare balance sheets, they still cannot agree Hannah thinks that she is better off because she has more cash and clothes. Aysha disagrees because she has greater capital. 1. In a paragraph, discuss these balance sheets with Hannah and Aysha. Explain to them how to measure a person's equity. Hannah and Aysha are school friends of yours at Vanier High School The two happen to be discussing their personal fortunes at the moment. Hannah is fo rich because she has $2 000 in a personal bank account. A distant aunt who recently left her the money. Aysha feels pretty well off, too. She has less money but she does have so valuable possessions, including fashionable clothes and jewellery, as well as S shares that were left to her by her grandmother. For reasons that she ca explain, she feels that she is just as well off as Hannah. You get into the conversation at lunch break. You suggest to the two girls thi they each prepare a personal balance sheet. You explain how to go about it and hoy to estimate the value of non-cash items. The balance sheets, you say, will show wha is better off financially. The girls prepare their balance sheets according to your directions and come with the following: HANNAH'S BALANCE SHEET SEPTEMBER 30, 20- AYSHA'S BALANCE SHEET SEPTEMBER 30, 20- Assets Assets $ 10 $2 000 I 500 Bank Balance Bank Balance Clothes CD Player Jewellery IBM Shares 500 1 000 I 100 I 200 Total Assets $3 500 Clothes Total Assets $3 810 Liabilities and Equity Debts Owing Hannah's Capital Liabilities and Equity Debts Owing Aysha's Capital nil $3 500 Total Liabilities and Equity $3 500 $ 200 3 610 Total Liabilities and Equity $3810 When the two girls get together to compare balance sheets, they still cannot agree Hannah thinks that she is better off because she has more cash and clothes. Aysha disagrees because she has greater capital. 1. In a paragraph, discuss these balance sheets with Hannah and Aysha. Explain to them how to measure a person's equity.

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Is money Better Concept of Personal Equity Personal equity is refer to the total sum of assets of an ... View the full answer