explain the impact of the transactions on their Statement of Financial Position:

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Sarah and Gabe are considering the following transactions and have asked you to explain the impact of the transactions on their Statement of Financial Position:

  • Purchase a baseball card collection from Gabe’s uncle for $5,000 cash. Gabe feels the cards are worth more than $5,000. There has never been an official appraisal of the collection.
  • Secure a home-equity loan of $25,000 to have on hand for various projects and possibly to take a family vacation abroad.
  • Trade the pick-up for an SUV at a cost of $40,000. They will use their pick-up truck as a trade-in as a down payment, the current value is estimated at $7,000, and borrow the balance at a projected rate of 5%.
  • Also, they anticipate their respective 401(k) accounts increasing in value by 15% this year and have asked if this will have any impact on their financial statements.

please explain properly thnku

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