Chapter 1 Student name:__________ 1) A firm has common stock of $86, paid-in surplus of $230, total liabilities of $390, current assets of $350, and net fixed assets of $560. What is the amount of the shareholders' equity? A) $910 B) $510 C) $520 D) $170 E) $706 2) Recently, the owner of Martha's Wares encountered severe legal problems and is trying to sell her business. The company built a building at a cost of $1,190,000 that is currently appraised at $1,390,000. The equipment originally cost $670,000 and is currently valued at $417,000. The inventory is valued on the balance sheet at $360,000 but has a market value of only one-half of that amount. The owner expects to collect 97 percent of the $200,200 in accounts receivable. The firm has $11,200 in cash and owes a total of $1,390,000. The legal problems are personal and unrelated to the actual business. What is the market value of this firm? A) $1,182,594 B) $802,394 C) $597,000 D) $1,542,594 E) $982,394 3) Ivan's, Incorporated, paid $500 in dividends and $595 in interest this past year. Common stock increased by $205 and retained earnings decreased by $131. What is the net income for the year? A) $369 B) $800 C) $595 D) $964 E) $500