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NeTakaya
3 years ago
5

Klingon Widgets, Inc., purchased new cloaking machinery three years ago for $4.4 million. The machinery can be sold to the Romul

ans today for $6.6 million. Klingon’s current balance sheet shows net fixed assets of $3.2 million, current liabilities of $750,000, and net working capital of $134,000. If all the current accounts were liquidated today, the company would receive $865,000 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.)
Business
1 answer:
Aliun [14]3 years ago
6 0

Answer:

(a) $4,084,000

(b) $6,715,000

Explanation:

(a) Current Assets:

= Current Liabilities + Working Capital

= $750,000 + $134,000

= $884,000

Therefore, the book value of Klingon’s total assets today is as follows;

= Current Assets book value + Net fixed assets

= $884,000 + $3,200,000

= $4,084,000

(b) Market value of NWC:

= market value of current assets - current liabilities

= $865,000 - $750,000

= $ 115,000

Sum of market values of NWC and fixed assets:

= Market value of NWC + Market value of fixed assets

= $ 115,000 + $6,600,000

= $6,715,000

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