Acme Bricks balance sheet lists net fixed assets as $40 million. The fixed assets could currently be sold for $50 million. Acme's current balance sheet shows current liabilities of $15 million and net working capital of $12 million. If all the current accounts were liquidated today, the company would receive $77 million cash after paying $15 million in liabilities. What is the book value of Acme's assets today? What is the market value of these assets?
A) $12 million, $77 million
B) $27 million, $92 million
C) $40 million, $50 million
D) $67 million, $142 million

Question

Quizplus · Accepted Answer

The book value of Acme's assets today is calculated by adding net fixed assets ($40 million) to the net working capital ($12 million) plus the current liabilities ($15 million), which equals $67 million. The market value of these assets is the sum of the current market value of the fixed assets ($50 million) plus the cash received from liquidating current accounts ($77 million), totaling $142 million.

Acme Bricks Balance Sheet Lists Net Fixed Assets as $40