A mortgage brokerage company's net worth calculation includes $30,000 in cash, $15,000 in accounts receivable, $50,000 in office equipment, and $25,000 in liabilities. For regulatory purposes, what is the company's allowable net worth?
Correct Answer
C) $20,000
For regulatory net worth calculations under the SAFE Act, only liquid assets typically count toward the requirement. Cash ($30,000) and potentially accounts receivable ($15,000) minus liabilities ($25,000) equals $20,000. Fixed assets like office equipment are generally excluded from regulatory net worth calculations.
Why This Is the Correct Answer
For regulatory net worth calculations under the SAFE Act, only liquid assets typically count toward the requirement. Cash ($30,000) and potentially accounts receivable ($15,000) minus liabilities ($25,000) equals $20,000. Fixed assets like office equipment are generally excluded from regulatory net worth calculations.
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