Question

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?

Answer 1

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.