Klingon Widgets, Inc., purchased new cloaking machinery three years ago for $4 million. The machinery can be

Question:

Klingon Widgets, Inc., purchased new cloaking machinery three years ago for $4 million. The machinery can be sold to the Romulans today for $6.2 million. Klingon’s current balance sheet shows net fixed assets of $2.8 million, current liabilities of $710,000, and net working capital of $ 130,000. If all the current assets were liquidated today, the company would receive $825,000 cash. What is the book value of Klingon’s assets today? What is the market value?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...