To determine the smoothie shop's total net worth, we must first calculate the total assets and total liabilities, incorporating the new information that an additional \[tex]$25,000 has been added to the small business loan.
Step 1: List all the assets and calculate total assets
The assets of the smoothie shop are:
- Owned Inventory: \$[/tex]42,970
- Cash: \[tex]$229,682
- Savings Account: \$[/tex]135,327
- Owned Equipment: \[tex]$34,823
- Accounts Receivable: \$[/tex]10,265
- Property Value: \[tex]$25,789
To find the total assets, we sum these values:
\[
\text{Total Assets} = \$[/tex]42,970 + \[tex]$229,682 + \$[/tex]135,327 + \[tex]$34,823 + \$[/tex]10,265 + \[tex]$25,789
\]
Thus,
\[
\text{Total Assets} = \$[/tex]478,856
\]
Step 2: List all the liabilities and calculate total liabilities
The liabilities of the smoothie shop are:
- Long Term Liabilities: \[tex]$56,000
- Building Mortgage: \$[/tex]110,650
- Small Business Loan (initial): \[tex]$186,987
- Additional amount for Small Business Loan: \$[/tex]25,000
- Other Debt: \[tex]$125,000
Note that the small business loan increases by \$[/tex]25,000 for the equipment repairs:
[tex]\[
\text{Adjusted Small Business Loan} = \$186,987 + \$25,000 = \$211,987
\][/tex]
To find the total liabilities, we sum these values:
[tex]\[
\text{Total Liabilities} = \$56,000 + \$110,650 + \$211,987 + \$125,000
\][/tex]
Thus,
[tex]\[
\text{Total Liabilities} = \$503,637
\][/tex]
Step 3: Calculate the net worth
Net worth is calculated by subtracting the total liabilities from the total assets:
[tex]\[
\text{Net Worth} = \text{Total Assets} - \text{Total Liabilities}
\][/tex]
[tex]\[
\text{Net Worth} = \$478,856 - \$503,637
\][/tex]
[tex]\[
\text{Net Worth} = -\$24,781
\][/tex]
Therefore, the smoothie shop's total net worth, after adding the \[tex]$25,000 to the small business loan for equipment repairs, is \(-\$[/tex]24,781\).
