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21 November, 14:17

Ferry Boat Corporation has the following financial information: Net fixed assets: Book value: $2,500, Market value: $3,000 Net working capital: $700 Current accounts liquidated: $1,500 ABC Corporation has $900 in long-term debt. What is the book value of equity?

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  1. 21 November, 16:43
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    Book value of equity is $2300

    Explanation:

    given data

    net fix assets of book value = $2500

    Market value = $3000

    Net working capital = $700

    Current accounts liquidated = $1500

    long-term debt = $900

    to find out

    What is the book value of equity

    solution

    we know that share holder equity is assets minus liability

    so here

    Book value of equity is = Book value of assets - Book value of liabilities ... 1

    so

    book value of assets = net working capital + net fixed assets of book value

    book value of assets = 700 + 2500

    book value of assets = $3200

    and

    Book value of liabilities = long-term debt = $900

    so from equation 1

    Book value of equity is = 3200 - 900

    Book value of equity is $2300
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