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25 July, 22:47

Alfonzo's Pizzeria purchased its building 8 years ago at a cost of $76,000. The building is currently valued at $212,000. Alfonzo's has other fixed assets that cost $58,000 and are currently valued at $69,000. To date, Alfonzo's has recorded a total of $83,000 in depreciation on the various assets. The company has current liabilities of $43,000 and net working capital of $32,000. What is the total book value of the assets of Alfonzo's Pizzeria?

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  1. 25 July, 23:11
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    Answer: Total book value of assets = $126000

    Explanation:

    Given that,

    Alfonzo's Pizzeria purchased a building 8 years ago = $76,000

    building is currently valued = $212,000

    Other fixed assets that cost = $58,000

    currently valued at $69,000

    To date, total depreciation on various assets = $83,000

    current liabilities = $43,000

    net working capital = $32,000

    Non-current assets = $76,000 + $58,000

    = $134000

    Current assets = working capital + current liabilities

    = $32,000 + $43,000

    = $75,000

    Therefore,

    Total book value of assets = Current assets + Non-current assets - total depreciation

    = 75000 + 134000 - 83000

    = $126000

    Here, we are ignoring the current value of building because of conservatism rule of accounting.
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