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Accounting

Problem:

Klingon Widgets, Inc., purchased new cloaking machinery three years ago for $7.4 million. The machinery can be sold to the Romulans today for $4.45 million. Klingon's current balance sheet shows net fixed assets of $2.95 million, current liabilities of $1.7 million, and net working capital of $500,000. If all the current assets were liquidated today, the company would receive $1.5 million cash.

Required:

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

Question 2: What is the market value?

Note: Please show how you came up with the solution.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91171398

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