Compute the book value of Vega at January 1, 2016.
A) $ 997,500.
B) $ 857,500.
C) $1,200,000.
D) $1,600,000.
E) $ 827,500.

Question

Quizplus · Accepted Answer

Book value = Total assets - Total liabilities
= (Cash + Equipment + Buildings) - (Notes payable + Accounts payable + Bonds payable)
= ($50,000 + $900,000 + $800,000) - ($150,000 + $750,000 + $42,500)
= $1,500,000 - $942,500
= $857,500
Thus, the book value of Vega at January 1, 2016 is $857,500, which corresponds to option B.

Compute the Book Value of Vega at January 1, 2016