Question

Klingon Widgets, Inc., purchased new cloaking machinery three years ago for $4.8 million. The machinery can be sold to the Romulans today for $7 million. Klingon's current balance sheet shows net fixed assets of $3.6 million, current liabilities of $790,000, and net working capital of $138,000. If all the current accounts were liquidated today, the company would receive $905,000 cash. a. What is the book value of Klingon's total assets today? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567.) b. What is the sum of the market value of NWC and the market value of fixed assets? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567.) a. Book value of total assets b. Sum of market value of NWC and fixed assets $ 7,905,000

Answer 1

solution: net fixed assets current assets (Net working capital + current liabilities)=138000 +790000 book value of total assets 3600000 928000 | 4528000 market value of NWC Market value of fixed assets sum of the market value of NWC and fixed assets 905000 7000000 7905000