Klingon widgets, inc., purchased new cloaking machinery three years ago for $6 million. the machinery can be sold to the romulans today for $5.3 million. klingon's current balance sheet shows net fixed assets of $3.2 million, current liabilities of $900,000, and net working capital of $215,000. if all the current assets were liquidated today, the company would receive $1.25 million cash.

Question

Tyrese Clarke

Mathematics

22 August, 11:06

Klingon widgets, inc., purchased new cloaking machinery three years ago for $6 million. the machinery can be sold to the romulans today for $5.3 million. klingon's current balance sheet shows net fixed assets of $3.2 million, current liabilities of $900,000, and net working capital of $215,000. if all the current assets were liquidated today, the company would receive $1.25 million cash.

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Karla Bernard · Answer 1

Book Value:

The book value of fixed assets is given at $3.2 million.

Use the working capital formula to find current assets.

Current Assets - Current Liabilities = Working Capital

Current Assets - 900,000 = 215,000

Current Assets = $1,115,000

3,200,000 + 1,115,000 = $4,315,000 book value of total assets

Market Value:

If this is the only information you're given, the market value would be:

$5.3 million + $1.25 million = $6.55 million

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