Lileth Adriano, who plans to go abroad, is selling her mini-donut business. Her friend, Benita Solido is interested to buy it but can only afford to pay P350,000. The following are the assets of Adriano’s business: Book Value Market Value Equipment (net of accumulated depreciation of P25,000) P350,000 P300,000 Furniture and Fixtures (net of accumulated depreciation of P5,000) 75,000 50,000 Raw Materials 35,000 25,000 Franchise Right 150,000 100,000 Total P610,000 P475,000 a. How much is the net worth assuming there is a mortgage note of P150,000 attached to the equipment? b. Will Benita Solido be able to afford to buy the business? c. Make the entry in the books of Benita.
Lileth Adriano, who plans to go abroad, is selling her mini-donut business. Her friend, Benita Solido is interested to buy it but can only afford to pay P350,000. The following are the assets of Adriano’s business: Book Value Market Value Equipment (net of accumulated depreciation of P25,000) P350,000 P300,000 Furniture and Fixtures (net of accumulated depreciation of P5,000) 75,000 50,000 Raw Materials 35,000 25,000 Franchise Right 150,000 100,000 Total P610,000 P475,000 a. How much is the net worth assuming there is a mortgage note of P150,000 attached to the equipment? b. Will Benita Solido be able to afford to buy the business? c. Make the entry in the books of Benita.
Chapter11: Property Dispositions
Section: Chapter Questions
Problem 24P
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Question
Lileth Adriano, who plans to go abroad, is selling her mini-donut business. Her friend, Benita Solido is interested to buy it but can only afford to pay P350,000. The following are the assets of Adriano’s business:
Book Value | Market Value | |
Equipment (net of accumulated |
P350,000 | P300,000 |
Furniture and Fixtures (net of accumulated depreciation of P5,000) |
75,000 | 50,000 |
Raw Materials | 35,000 | 25,000 |
Franchise Right | 150,000 | 100,000 |
Total | P610,000 | P475,000 |
a. How much is the net worth assuming there is a mortgage note of P150,000 attached to
the equipment?
b. Will Benita Solido be able to afford to buy the business?
c. Make the entry in the books of Benita.
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ISBN:
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Author:
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Publisher:
CENGAGE LEARNING - CONSIGNMENT