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Brenda’s Bar and Grill has total assets of $12.0 million, of which $6.0 million are current...

Brenda’s Bar and Grill has total assets of $12.0 million, of which $6.0 million are current assets. Cash makes up 10 percent of the current assets and accounts receivable makes up another 40 percent of current assets. Brenda’s gross plant and equipment has a book value of $13.0 million and other long-term assets have a book value of $500,000. What is the balance of inventory and the balance of depreciation on Brenda's Bar and Grills balance sheet?

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Expert Solution

Current assets $             6,000,000 Given
PPE (Net $             5,500,000 Difference
Other long term assets                     500,000 Given
Total Assets $          12,000,000 Given
Since PPE gross $          13,000,000
PPE net $             5,500,000
Accumulated Depreciation $             7,500,000
Current assets is 6 Million of which 10% is cash and 40% is Accounts Receivable
So balance 50% consists of inventory i.e. $6M x 50% = $3,000,000
Inventory $3,000,000

jeff jeffy answered 2 years ago
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