Martha's Enterprises spent $2,400 to purchase equipment three years ago. This equipment is currently valued at $1,800 on today's statement of financial position but could actually be sold for $2,000. Net working capital is $200 and long-term debt is $800. What is the book value of shareholders' equity?

Question

Quizplus · Accepted Answer

The book value of shareholders' equity is calculated as the difference between total assets and total liabilities. The equipment's book value is $1,800, net working capital is $200, and long-term debt is $800. Therefore, shareholders' equity is $1,800 + $200 - $800 = $1,200.

Martha's Enterprises Spent $2,400 to Purchase Equipment Three Years Ago