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Accounting

Problem:

Klingon Cruisers, Inc., purchased new cloaking machinery four years ago for $4 million. The machinery can be sold to the Romulans today for $3.5 million. Klingon's current balance sheet shows net fixed assets of $3 million, current liabilities of $730,000, and net working capital of $228,000. If all the current assets were liquidated today, the company would receive $1.1 million cash.

Required:

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

Question 2: What is the market value?

Note: Please provide through step by step calculations.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91166478

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