Question

In: Accounting

Brenda's Bar and Grill has total assets of $17.0 million, of which $11.0 million are current assets. Cash makes up 10 percent of the

Brenda's Bar and Grill has total assets of $17.0 million, of which $11.0 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 $15.5 million and other long-term assets have a book value of $400,000. What is the balance of inventory and the balance of depreciation on Brenda's Bar and Grill's balance sheet?

a. Inventory = $___

b. Depreciation = $ ____

Expert Solution

a. Inventory is conmputed as follows:

= Total current assets - cash - accounts receivable

= $ 11.0 million - 10% x $ 11.0 million - 40% x $ 11.0 million

= $ 11.0 million - $ 1.1 million - $ 4.4 million

= $ 5.5 million or $ 5,500,000

b. Depreciation is computed as follows:

Assets other than current assets are as follows:

= Total Assets - Current Assets

= $ 17.0 million - $ 11.0 million

= $ 6.0 million

Net Plant and Equipment will be as follows:

=Assets other than current assets - Long term assets

= $ 6,000,000 - $ 400,000

= $ 5,600,000

So, the depreciation will be as follows:

= Gross Plant and Equipment - Net Plant and Equipment

= $ 15,500,000 - $ 5,600,000

= $ 9,900,000

a. Inventory is conmputed as = $ 5.5 million or $ 5,500,000

b. Depreciation is computed as $ 9,900,000

Junaid answered 2 years ago

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?

Problem 2-17 Balance Sheet (LG2-1) Mikey's Bar and Grill has total assets of $23 million, of...

Problem 2-17 Balance Sheet (LG2-1) Mikey's Bar and Grill has total assets of $23 million, of which $17 million are current assets. Cash makes up 10 percent of the current assets and accounts receivable makes up another 40 percent of current assets. Mikey's gross plant and equipment has a book value of $18.5 million, and other long-term assets have a book value of $400,000. What is the balance of inventory and the balance of depreciation on Mikey’s Bar and Grill’s...

a firm has total assets of 25 million TL. Its current assets is 10 million TL...

a firm has total assets of 25 million TL. Its current assets is 10 million TL and fixed assets (machinery, real estate etc) is 15 million TL. This firm’s financial leverage is %45. Firm has 1 500 000 total outstanding shares with 900 000 shares trading at the stock market and one share sells 10 TL in the stock market. What is the firm’s Price/Book ratio( PD/DD)? Calculate the expected stock price and market cap if the average Price/Book ratio...

A DI has assets of $17 million consisting of $7 million in cash and $10 million...

A DI has assets of $17 million consisting of $7 million in cash and $10 million in loans. It has core deposits of $13 million. It also has $2 million in subordinated debt and $2 million in equity. Increases in interest rates are expected to result in a net drain of $1 million in core deposits over the year. a-1. The average cost of deposits is 2 percent and the average yield on loans is 5 percent. The DI decides...

Rock construction has current assets of 45 million, total liabilities and equity of 67 million, and...

Rock construction has current assets of 45 million, total liabilities and equity of 67 million, and sales of 59 million. How would current assets be expressed on a common size balance sheet?

Alright Insurance has total assets of $140 million consisting of $50 million in 2-year, 6 percent...

Alright Insurance has total assets of $140 million consisting of $50 million in 2-year, 6 percent Treasury notes, and $90 million in 10-year, 7.2 percent fixed-rate Baa bonds. These assets are funded by $100 million 5-year, 5 percent fixed-rate GICs, and equity. Market interest rates are expected to increase by 1 percent to 11 percent in the next year. If this occurs, what will be the effect on the market value of equity of Alright?

The Lopez-Portillo Company has $10.1 million in assets, 90 percent financed by debt and 10 percent...

The Lopez-Portillo Company has $10.1 million in assets, 90 percent financed by debt and 10 percent financed by common stock. The interest rate on the debt is 14 percent and the par value of the stock is $10 per share. President Lopez-Portillo is considering two financing plans for an expansion to $15.5 million in assets. Under Plan A, the debt-to-total-assets ratio will be maintained, but new debt will cost a whopping 16 percent! Under Plan B, only new common stock...

The Lopez-Portillo Company has $12.1 million in assets, 90 percent financed by debt and 10 percent...

The Lopez-Portillo Company has $12.1 million in assets, 90 percent financed by debt and 10 percent financed by common stock. The interest rate on the debt is 11 percent and the par value of the stock is $10 per share. President Lopez-Portillo is considering two financing plans for an expansion to $25.5 million in assets. Under Plan A, the debt-to-total-assets ratio will be maintained, but new debt will cost a whopping 13 percent! Under Plan B, only new common stock...

Edelman Engines has $18 billion in total assets — of which cash and equivalents total $100...

Edelman Engines has $18 billion in total assets — of which cash and equivalents total $100 million. Its balance sheet shows $2.7 billion in current liabilities — of which the notes payable balance totals $0.82 billion. The firm also has $8.1 billion in long-term debt and $7.2 billion in common equity. It has 600 million shares of common stock outstanding, and its stock price is $22 per share. The firm's EBITDA totals $1.848 billion. Assume the firm's debt is priced...

Edelman Engines has $17 billion in total assets — of which cash and equivalents total $110...

Edelman Engines has $17 billion in total assets — of which cash and equivalents total $110 million. Its balance sheet shows $2.55 billion in current liabilities — of which the notes payable balance totals $1.12 billion. The firm also has $9.35 billion in long-term debt and $5.1 billion in common equity. It has 300 million shares of common stock outstanding, and its stock price is $25 per share. The firm's EBITDA totals $0.9 billion. Assume the firm's debt is priced...