XYZ Co., has cash of $900 and accounts receivable of $1,300. The inventory cost $4,200 and can be sold today for $6,100. The fixed assets were purchased at a cost of $42,800 of which $18,300 has been depreciated. The fixed assets can be sold today for $19,500. What is the total book value of the assets of the company?
Answer: $ 25,900
Working note for the above answer
We have been provided with the information as follow
Cash
900
accounts receivable
1300
inventory
4200
The fixed asset purchased at
42800
Depriciation till date
18300
Now we will calculate book Value of the the Fixed assets as follow
Total Book Value of the Assets
Cash
900
accounts receivable
1300
inventory
4200
The fixed asset purchased at
19500
25900
Note:
Inventory is recorded as $ 4200 (lower of cost or market)
Fixed Assets is recorded as $19,500 (lower of cost or market) *These need to be written down since their value is impaired.
