Problemkilington widgets inc purchased new cloaking, Ask an Expert

Accounting

Problem:

Kilington Widgets, Inc. purchased new cloaking machinery three years ago for $4 million. The machinery can be sold to Romulans today for $6.2 million. Klingon's current balance sheet shows fixed assets of $2.8 million, current liabilities of $710,000, and new working capital of $130,000. If all the current assets were liquidated today, the company would receive $825,000 cash.

Required:

Question 1: What is the book value of Kingon's assets today?

Question 2: What is the market value?

Note: Provide support for your underlying principle.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91168042

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