Question

A delivery company purchased a bunch of new trucks three years ago for $6 million. These trucks can be sold today for $5.3 million. The delivery company's current balance sheet shows net fixed assets of $3.2 million, current liabilities of $900,000, and net working capital of $215,000. If all the current assets were sold today and converted into cash, the delivery company would receive $1.25 million Calculate the book value of the delivery company's total assets today. (Enter your answer in dollars, not millions of dollars, i.e. 1,234,567.) points Book value of total assets Now, instead, calculate their market value. (Enter your answer in dollars, not millions of dollars, i.e. 1,234,567.) Market value of total assets

Answer 1

Answer a.

Net Fixed Assets = $3,200,000
Current Liabilities = $900,000
Net Working Capital = $215,000

Current Assets = Current Liabilities + Net Working Capital
Current Assets = $900,000 + $215,000
Current Assets = $1,115,000

Total Assets = Current Assets + Net Fixed Assets
Total Assets = $1,115,000 + $3,200,000
Total Assets = $4,315,000

Answer b.

Market Value of Current Assets = $1,250,000
Market Value of Net Fixed Assets = $5,300,000

Market Value of Total Assets = Market Value of Current Assets + Market Value of Net Fixed Assets
Market Value of Total Assets = $1,250,000 + $5,300,000
Market Value of Total Assets = $6,550,000