The Book Value of Little Statistic's Total Assets Is $400,000

question 21

Essay

The book value of Little Statistic's total assets is $400,000.Suppose Number Crunching Inc.acquires Little Statistic's assets for $1 million and finances the purchase by selling $600,000 in new stock,$300,000 in new debt,and reducing cash by $100,000.Describe how the acquisition affects Number Crunching's balance sheet.

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Definitions:

Accrued Property Taxes

Property taxes that have been incurred but not yet paid, recorded as a liability on the balance sheet.

Parking Lots

Designated areas where vehicles can be parked, often found near businesses, public spaces, or commercial buildings.

Depletion

The allocation of the cost of natural resources over their useful life or extraction period, reflecting the reduction in the resource's value.

Owner's Equity

The residual interest in the assets of the entity after deducting liabilities, often referred to as shareholders' equity or net worth.