27. (5 points) Klingon Widgets, Inc., purchased new cloaking machinery four year

Question

27. (5 points) Klingon Widgets, Inc., purchased new cloaking machinery four years ago for $12 million. The machinery can be sold to the Romulans today for $10.8 million. Klingon's current balance sheet shows net fixed assets of $10 million, current liabilities of $830,000, and net working capital of $248,000. If all the current assets were liquidated to the company would receive $1.15 million cash. What is the book value of Klingon's total assets today? What is the mar, value of Klingon's total assets today?

Explanation / Answer

Book Value of Total Assets: 12,000,000+1,078,000+10,000,000+ Depreciation charged on Fixed Assets

: $23,078,000+ Depreciation charged on Fixed Assets

Book Value of Current Assets= Working Capital+ Current Liabilities

= 248,000+830,000= 1,078,000

Market Value of Total Assets: 10800000+10000000+1150000= $21,950,000

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