Calculate the value of Gold Valley using the intrinsic value method.
Gold Valley Supplies has presented you with the following Trial Balance as at 31 December 2019.
DR CR
Share Capital (2000 Shares) 4 000
Long Term Loan 80 000
Retained Earnings 160 000
Trade Creditors 32 000
Land & Buildings at Cost 168 000
Investments at Cost 23 000
Cash on Hand 42 000
Debtors 43 000
276 000 276 000
Additional Information
1. An estate agent has revalued the land and buildings at R210 000.
2. The long term loan is interest free from the owner.
3. A provision for bad debts of 10% is required on the debtors figure.
4.The investments consist of 23 000 shares at R1 each now valued at R1.43 per share.
Required:
1) Calculate the value of Gold Valley using the intrinsic value method. (10)
2) Calculate the value of Gold Valley using the book value Method. (10)
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Calculate the value of Gold Valley using the intrinsic value method.
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