Knowing that you have some accounting experience, a friend has sought your advice regarding a business that he intends purchasing The balance sheet for the business shows total assets of $80 000 and liabilities of $50 000 The selling business has provided no notes to accompany the balance sheet On ...

The carrying amount of the net assets of the entity is 30 000 ie the 80 000 assets less the 50 000 l ...

Knowing that you have some accounting experience, a friend has sought your advice regarding a business that

Question:

Knowing that you have some accounting experience, a friend has sought your advice regarding a business that he intends purchasing. The for the business shows total assets of $80 000 and liabilities of $50 000. The selling business has provided no notes to accompany the On the basis of the information provided, your friend believes the business is worth $30 000. Advise your friend as to the accuracy of his assessment and what questions regarding the he should ask the seller of the business.
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...