1. What was Gannon’s total current assets at the end of 2017? 2. What was Gannon
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Question
1. What was Gannon’s total current assets at the end of 2017?
2. What was Gannon’s net working capital at the end of 2017?
3. What was Gannon’s shareholders’ equity at book value at the end of 2017?
4. An appraiser recently valued Gannon’s fixed assets at $600,000 and determined that $40,000 of their accounts receivable was noncollectible. Based on onlythis information and the balance sheet above, what was the market value of Gannon’s shareholders’ equity at the end of 2017?
5. Assuming that Gannon did not buy back or redeem any of its shares, how much new common stock did it issue in 2017?
YOU MUST SHOW ALL CALCULATIONS TO EARN CREDIT 2016 2017 BALANCE SHEETS: Assets: Cash Accounts Receivable Inventory Fixed Assets, net Total Assets 120,000 520,000 305,000 410,000 1,355,000 160,000 620,000 290,000 510,000 1,580,000 Liabilities and Equity: Accounts Payable Long-term Debt Common Stock Retained Earnin Total Liabilities and Equity 350,000 500,000 50,000 455,000 1,355,000 S375,000 625,000 75,000 505,000 1,580,000 INCOME STATEMENT: Revenue Cost of Goods Sold General and Administrative 3,500,000 2,275,000 515,000 120,000 590,000 40,000 550,000 167,000 383,000 iation Expense Earnings Before Interest and Taxes Interest Expense Pretax Net Income Income Taxes Net IncomeExplanation / Answer
Solution 1 Total Current Assets at end of 2017 Cash 160000 Account Receivable 620000 Inventory 290000 Total Current Assets 1070000 Solution 2 Current Liabilities Accounts Payable 375000 Net working Capital at end of 2017 NWC = Current Assets - Current Liabilities (1070000 - 375000) = 695000 Solution 3 Share holders book value of equity at end of 2017 75000 + 505000 = 580000 Solution 4:- Market Value of Equity = 630000 Cash 160000 Account Receivables 580000 Inventory 290000 Fixed Assets 600000 Less :- Liabilities Account Payable 375000 Long term debt 625000 Market Value 630000 Solution 5:- The New Common stock issued in 2017 is Equity end of 2017 - Equity end of 2016 75000 - 50000 = 25000
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