Problemklingon widgets inc purchased new cloaking machinery, Ask an Expert

Accounting

Problem:

Klingon Widgets, Inc., purchased new cloaking machinery five years ago for $10 million. The machinery can be sold to the Romulans today for $9.4 million. Klingon's current balance sheet shows net fixed assets of $8 million, current liabilities of $810,000, and net working capital of $247,000. If all the current assets were liquidated today, the company would receive $1.14 million cash.

Required:

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

Question 2: What is the market value?

Note: Please show how to work it out.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91168296

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