Respuesta :
Chester's balance sheet has $95,551,000 in equity. If next year, assets decrease by $4,000,000 and liabilities increase by $2,000,000, 97,551,000 will be Chester's book value.
Book value = total assets - intangible assets - liabilities
Book value= 95,551,000 + 4,000,000 - 2,000,000=
What is Book value?
All claims senior to common equity (such as the company's liabilities) are deducted from the accounting value of the company's assets to determine book value. The accounting practise of documenting asset value at the original historical cost in the books is where the phrase "book value" originates.
The term "book value" refers to a company's value as it appears on its financial statements and is taken from its books or accounts. Theoretically, this is what investors would receive if they liquidated all of the company's assets in order to settle all of its liabilities.
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