Question 1 & 2 (10 points)

Asset Valuation

Alberta Ltd.

Balance Sheet

December 31, 2016

	Net Book Value		Est. Market Value
Cash	$ 73,000		$ 73,000
Accounts Receivable	150,000		150,000
Inventories	145,000		120,000
Total Current Assets	$492,000
Land	146,000		250,000
Building	234,000		500,000
Equipment	168,000		175,000
Furniture and Fixtures	48,000		20,000
Total Assets	$1,088,000
Accounts Payable	$102,000
Accrued Liabilities	16,000
Note Payable	19,000
Total Liabilities	$137,000
Common Stocks	1,000
Retained Earnings	950,000
Total Liabilities and Equity	1,088,000

Other information:

Sales commissions equal 5% of gross proceeds on the disposition of ALL fixed assets

Assume all assets are disposed of at their Undepreciated Capital Cost balance amounts, so there are no recapture or terminal losses on any CCA classes.

$40,000 in professional fees and others costs to wind up corporation

Company tax rate on all income 40%. Note: In Canada, capital gains are included in income for taxes at 50% of the actual capital gain. There are no capital losses allowed on depreciable assets.

1. Calculate the Net Value of the business.

2. What is the Adjusted Net Book Value of the business?