29 September, 18:10

# Alfonzo's Pizzeria purchased its building 8 years ago at a cost of \$76,000. The building is currently valued at \$212,000. Alfonzo's has other fixed assets that cost \$58,000 and are currently valued at \$69,000. To date, Alfonzo's has recorded a total of \$83,000 in depreciation on the various assets. The company has current liabilities of \$43,000 and net working capital of \$32,000. What is the total book value of the assets of Alfonzo's Pizzeria?

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1. 29 September, 20:52
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Answer: Total book value of assets = \$126000

Explanation:

Given that,

Alfonzo's Pizzeria purchased a building 8 years ago = \$76,000

building is currently valued = \$212,000

Other fixed assets that cost = \$58,000

currently valued at \$69,000

To date, total depreciation on various assets = \$83,000

current liabilities = \$43,000

net working capital = \$32,000

Non-current assets = \$76,000 + \$58,000

= \$134000

Current assets = working capital + current liabilities

= \$32,000 + \$43,000

= \$75,000

Therefore,

Total book value of assets = Current assets + Non-current assets - total depreciation

= 75000 + 134000 - 83000

= \$126000

Here, we are ignoring the current value of building because of conservatism rule of accounting.