Roscoe's fixed assets were purchased three years ago for $1.8 million.These assets can be sold to Stewart's today for $1.2 million.Roscoe's current balance sheet shows net fixed assets of $960,000, current liabilities of $348,000, and net working capital of $121,000.If all the current assets were liquidated today, the company would receive $518,000 cash.The book value of the firm's assets today is _____ and the market value is ____.
A)$1,081,000; $1,308,000
B)$1,081,000; $1,718,000
C)$1,307,000; $1,429,000
D)$1,429,000; $1,308,000
E)$1,429,000; $1,718,000

Question

Quizplus · Accepted Answer

The book value is the sum of net fixed assets ($960,000) and net working capital ($121,000), totaling $1,081,000. The market value is the sum of the cash from liquidating current assets ($518,000) and the sale value of fixed assets ($1,200,000), totaling $1,718,000.

Roscoe's Fixed Assets Were Purchased Three Years Ago for $1