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Market Values and Book Values

1. Klingon Cruisers, Inc.., purchased new cloaking machinery three years ago for $9.5 million. The machinery can be sold to the Romulans today for $6.5 million. Klingon's current balance sheet shows net fixed assets of $5.2 million, current liabilities of$2.4 million, and net working capital of $800,000. If all the current assets were liquidated today, the company would receive $2.6 million cash. what is the book value of Klingon's assets today? What is the market value?(Answer in Excel Spread Sheet)

2. Building an Income Statement, During the year, the Senbet Discount Tire Company had gross sales of $1.06 million. The firm's cost of goods sold and selling expenses were $525,000 and $215,000, respectively. Senbet alo had note payable of $800,000. These notes carried an interest rate of 7 percent. Depreciation was $130,000, Senbet's tax rate was 35 percent.
a. What was Senbet's net income?( Answer in Excel)
b. What was Senbet's operating cash flow?(Answer in Excel)

3. Building a Balance Sheet, Bishop, Inc., has current assets of $5,700, net fixed assets of $27,000 current liabilities of $4,400, and long-term debt of $12,900. What is the value of the shareholders' equity account for this firm? How much is net working capital? (Answer in Excel)

4. Cash Flow to Creditors, The 2011 balance sheet of Anna's Tennis Shop, Inc., showed long-term debt of $1.45 million, and the 2012 balance sheet showed long-term debt of $1.52 million. The 2012 income statement showed an interest expense of $127. What was the firm's cash flow to creditors during 2012? (Excel)

Solution Summary

The expert examines market values and book values for net working capitals.