Paula Sanchez is trying to determine her 2019 finances. Paula's actual 2018 finances were as follows:

Income: Assets:

Gross income $ 69,000 Checking account $ 1,940 

Interest income 450 Savings account 9,150 

Total $ 69,450 Automobile 1,800 

Personal property 14,900 

Expenses: Total $ 27,790 

Living $ 24,200 Liabilities:

Insurance premium 400 Note to bank 5,200 

Taxes 15,200 Net worth $ 22,590 ($27,790 − $5,200)

Medical 630 

Investment 3,500 

Total $ 43,930 

Net worth = Assets − Liabilities

Paula believes her gross income will double in 2019 but her interest income will decrease $150. She plans to reduce her 2019 living expenses by one-fifth. Paula’s insurance company wrote a letter announcing that her insurance premiums would triple in 2019. Her accountant estimates her taxes will decrease $250 and her medical costs will increase $410. Paula also hopes to cut her investments expenses by one-fourth. Paula’s accountant projects that her savings and checking accounts will each triple in value. On January 2, 2019, Paula sold her automobile and began to use public transportation. Paula forecasts that her personal property will decrease by one-fifth. She has sent her bank a $370 check to reduce her bank note.

a. Could you give Paula an updated list of her 2019 finances?

b. If you round all the way each 2018 and 2019 asset and liability, what will be the difference in Paula’s net worth?

 

Answer rating: 100% (QA)

Lets break down the changes for Paulas 2019 finances category by category 1 Income Paulas gross inco... View the full answer