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xz_007 [3.2K]
3 years ago
10

Recently, the owner of Martha's Wares encountered severe legal problems and is trying to sell her business. The company built a

building at a cost of $1,100,000 that is currently appraised at $1,300,000. The equipment originally cost $580,000 and is currently valued at $327,000. The inventory is valued on the balance sheet at $270,000 but has a market value of only one-half of that amount. The owner expects to collect 97 percent of the $155,200 in accounts receivable it is owed. The firm has $11,100 in cash and owes a total of $1,400,000. The legal problems are personal and unrelated to the actual business. What is the market value of this firm?
Business
1 answer:
Dovator [93]3 years ago
4 0

Answer:

$523,644

Explanation:

The computation of the market value of this firm is shown below;

Asset at realizable value      amount ($)

Building appraised value       $1,300,000

Equipment current value        $327,000

Inventory Market value ($270000 ÷ 2)  $135,000

Accounts receivables ($155,200 × 97%) $150,544

Cash        $11,100

Total assets gross available  $1,923,644

(-) Owings                            -$1,400,000

The Market value of the firm        $523,644

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