Assume that market and book values are equal for current assets, current liabilities, and debt and other long-term liabilities.

Assume that market and book values are equal for current assets, current liabilities, and debt and other long-term liabilities.

SIMPLIFIED BALANCE SHEET OF GOOD FORTUNES, INC. FOR MAY 31, 2010 (Millions of dollars)
Current assets	$	7,290	Current liabilities	$	4,651
Plant, equipment and other long-term assets		17,630	Debt and other long-term liabilities		6,452
			Shareholders’ equity		13,817
Total assets	$	24,920	Total liabilities and equity	$	24,920

Note: Shares of stock outstanding: 320 million. Book value of equity (per share): 13,817/320 = $43.18. The stock price is $77.50.

a.	Construct a market-value balance sheet from the above data. (Be sure to list the assets and liabilities in order of their liquidity. Enter your answers in millions rounded to 2 decimal places.)

SIMPLIFIED BALANCE SHEET OF GOOD FORTUNES, INC. FOR MAY 31, 2010 (Millions of dollars)
Current assets	$	Current liabilities	$
Plant, equipment and other long-term assets		Debt and other long-term liabilities
Growth opportunities		Shareholders' equity
Total assets	$	Total liabilities and equity	$

b.	How much extra value shows up on the asset side of the balance sheet? (Enter your answer in millions rounded to 2 decimal places.)

Extra value on the asset side

$ million

Explanation:

The market value of shareholders' equity is found as the price per share ($77.50) multiplied by the number of shares outstanding (320 million), or $24,800,000,000. An additional $10,983,000,000 shows up on the asset side of the balance sheet ($24,800,000,000 − 13,817,000,000).