Chapter 2, Problem 17QP

a)

Summary Introduction

To determine: The market value of shareholders’ equity when the market value of assets is $9,300

Introduction: Market value refers to the value that the asset will fetch if it is sold in the open market. The market value of shareholders’ equity is the value at which the owner can buy and sell the equity share of the company. It cannot be negative because it is practically impossible to have a negative net worth. Moreover, the law states that the net worth of an individual or a corporation cannot be negative.

b)

Summary Introduction

To determine: The market value of shareholders’ equity when the market value of assets is $6,900.