Klingon Widgets, Inc., purchased new cloaking machinery three years ago for $7.7
ID: 2817093 • Letter: K
Question
Klingon Widgets, Inc., purchased new cloaking machinery three years ago for $7.7 million. The machinery can be sold to the Romulans today for $4.2 million. Klingon's current balance sheet shows net fixed assets of $3.05 million, current liabilities of $2.4 million, and net working capital of $510,000. If all the current assets were liquidated today, the company would receive $1.15 million cash.
What is the book value of Klingon's assets today? (Click to select) 7,110,000 10,610,000 4,200,000 3,050,000 5,960,000Explanation / Answer
a)
current assets=net working capital+current liabilities
=510000+(2.4*1000000)
=2910000
What is the book value of Klingon's assets today
=current asset+net fixed assets
=2910000+(3.05*1000000)
=5960000
b)
What is the market value
=(1.15+4.2)*1000000
=5350000
the above is answer..
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