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Eva8 [605]
4 years ago
12

Muffin’s Masonry, Inc.’s, balance sheet lists net fixed assets as $18.00 million. The fixed assets could currently be sold for $

27.00 million. Muffin’s current balance sheet shows current liabilities of $7.50 million and net working capital of $6.50 million. If all the current accounts were liquidated today, the company would receive $7.45 million cash after paying the $7.50 million in current liabilities.
What is the book value of Muffin’s Masonry’s assets today and the market value of these assets? (Enter your answers in millions of dollars rounded to 2 decimal places.)

BOOK VALUE MARKET VALUE

Current assets $ m $ m

Fixed assets m m

Total $ m $ m
Business
1 answer:
jeyben [28]4 years ago
8 0

Answer:

                                     Book Value                          Market Value

Current Assets              $14 m                                        $14.95 m

Fixed Assets                  $18 m                                        $27 m

Total                               $32 m                                        $41.95 m

Explanation:

For book Value:

Net fixed assets=$18.00 million

Current Liabilities=$7.50 million

net working capital=$6.50 million

Formula:

Net working capital=Current assets-Current Liabilities

$6.50 million=Current assets-$7.50 million

Current Assets=$6.50+$7.50

Current Assets=$14 million

Total Assets=Net fixed assets+Current Assets

Total Assets=$18 m+$14 m

Total Assets=$32 m

For Market Value:

Net fixed assets=$27.00 million

Current Liabilities=$7.50 million

net working capital=$7.45 million

Formula:

Net working capital=Current assets-Current Liabilities

$7.45 million=Current assets-$7.50 million

Current Assets=$7.45+$7.50

Current Assets=$14.95 million

Total Assets=Net fixed assets+Current Assets

Total Assets=$27 m+$14.95 m

Total Assets=$41.95 m

                                     Book Value                          Market Value

Current Assets              $14 m                                        $14.95 m

Fixed Assets                  $18 m                                        $27 m

Total                               $32 m                                        $41.95 m

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3 0
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4 years ago
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On January 5, 2020, Sheffield Corporation received a charter granting the right to issue 5,100 shares of $100 par value, 7% cumu
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Answer:

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Journal Entries

Date             Description                              DR                           CR

Jan 11         Cash                                       292,500

                 Common stock                                                     195,000

                 Paid in Capital for common stock                         97,500

               

              <em>Being the amount received on issue of </em>

<em>              </em>

Feb 11     Equipment                                   53,300

              Factory Building                          152,000

              Land                                             295,000

             Prefereed stock                                                     410,000

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July 29   Treasury stock                              25,600

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            Being the payment of own share purchased

Aug 10    Cash                                                   22,400

                Retained Earnings                               3,200

               Treasury stock                                                      25,600

 

Dec 31       Retained  earnings                              10,025

                 Dividend(0.35*19500)                                            6,825  

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Dec 31       Net Income ( Income Summary)      158,400

                  Retained Earnings                                               158,400

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Equity

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7% Preferred Stock                                                            410,000

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Retained Earnings ( 158,400-6825-3200)                         <u> 148,375</u>

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Explanation:

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Answer:

B) diminishing marginal utility

Explanation:

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As utility falls, consumers would be unwilling to buy more goods at the same price, therefore it would be reasonable to reduce price to encourage consumption.

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