What is the book value of Jones Company stock?
Debit Common stock $500,000 and debit Preferred stock $300,000. Webb Company purchased 90% of Jones Company for $990,000 when the book value of Jones was $1,000,000. There was no premium paid by Webb. Jones currently has 100,000 shares outstanding and a book value of $1,200,000.
How much did Webb Company pay for Jones Company?
Webb Company purchased 90% of Jones Company for $990,000 when the book value of Jones was $1,000,000. There was no premium paid by Webb. Jones currently has 100,000 shares outstanding and a book value of $1,200,000. Assume Jones issues 20,000 new shares of its common stock to outside parties for $15 per share.
What is the adjusted book value of a company?
Updated Jul 5, 2019. Adjusted book value is the measure of a company's valuation after liabilities, including off-balance sheet liabilities, and assets are adjusted to reflect true fair market value.
What are the adjustments for receivables and inventory?
The value of receivables may have to be adjusted, depending on the age of the receivables. For example, receivables that are 180 days past due (and likely doubtful) will get a haircut in value compared to receivables under 30 days. Inventory can be subject to adjustment, depending on the inventory accounting method.
Why do companies use adjusted book value?
The adjusted book value method of valuation is most often used to assign value to distressed companies facing potential liquidation or companies that hold tangible assets. The downside of using adjusted book value is that a business could be worth more than its stated assets and liabilities because it fails to value intangible assets.
What is adjusted book value?
Adjusted book value is the measure of a company's valuation after liabilities—including off-balance sheet liabilities—and assets adjusted to reflect true fair market value. The potential downside of using adjusted book value is that a business could be worth more than its stated assets and liabilities because it fails to value intangible assets, ...
How long are receivables past due?
The value of receivables may have to be adjusted, depending on the age of the receivables. For example, receivables that are 180 days past due (and likely doubtful) will get a haircut in value compared to receivables under 30 days. Inventory can be subject to adjustment, depending on the inventory accounting method.
