Question

ZYX Inc. shows the following balance sheet as of 12/31/2016 (in US $ millions):

Assets		Liabilities
Cash & checking deposits	3	Short-term debt	10
Accounts receivable	4	Accounts payable	6
Inventories & supplies	8	Mortgage debt	14
Vehicles	12	Total debt	30
Machinery & equipment	16
Buildings & structures	24	Equity	37
Total assets	67	Total liabilities	67

ZYX's chief financial officer anticipates that the income statement from 1/1/2017 through 12/31/2017 will show the following figures (US $ millions):

(+) Total revenues	50
(-) Cost of goods sold	22
(-) Operating expenses (incl. depreciation)	10
(-) Interest payments & other financial expenses	4
(-) Taxes	2

If ZYX's chief financial officer's expectations are fulfilled, what will the value of the company's total assets be as of 12/31/2017. Assume that total debt (the sum of short-term, accounts payable, and mortgages) stays at the same level as on 12/31/2016. (The possible answers are all in millions of US $.)

Answer 1

Balance sheet

Assets	Amount	Liabilities	Amount
Cash & checking deposits	3
Accounts receivable	4	Short-term debt	10
Inventories & supplies	8	Accounts payable	6
Fixed assets		Mortgage debt	14
new FA asset	22	Total debt	30
Vehicles , Machinery & equipment & Buildings & structures	42	Equity	37
		Reserve & surplus	12
Total assets	79	Total liabilities	79

* Total assets = 12+16+24 = 52

total assets - dep = 52-10= 42

Therefore value of assets = $79 millions we can also adjust difference of balance sheet in cash or debtors after taking suitable assumptions

Revenue Account

(+) Total revenues	50
(-) Cost of goods sold	22
(-) Operating expenses (incl. depreciation)	10
(-) Interest payments & other financial expenses	4
(-) Taxes	2
Profit	12

It is assumed that operating Expenses includes only Depreciation expenses.