Ez toy inc. lists fixed assets of $25 million on its balance sheet. The firm\'s
ID: 2704488 • Letter: E
Question
Ez toy inc. lists fixed assets of $25 million on its balance sheet. The firm's fixed assets were recently appraised at $32 million. EZ toy inc's balance sheet also lists current assests at $10 million. Current assets were appraised at $11 million. Current liabilities' book and market values stand at $6 million and the firm's long term debt is $15 million. Calculate the book and market values of the firm's stockholder equity. Construct the book value and market value balance sheet for EZ toy inc.
Explanation / Answer
Book value balance sheet
assets = fixed assets + current assests
=$25 million +$10 million = $ 35 million
liablities = Current liabilities +long term debt
= $6 million +$15 million= $ 21 million
firm's stockholder equity= assets - liablities =35- 21=$ 14 million
Market value balance sheet
assets = fixed assets + current assests
=$ 32 million +$11 million = $ 43 million
liablities = Current liabilities +long term debt
= $6 million +$15 million= $ 21 million
firm's stockholder equity= assets - liablities = 43- 21=$ 22 million
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