A. Nenita Mendoza, who plans to go abroad, is selling her mini-donut business. Her friend Benita Peña is interested to buy it but can only afford to pay Php. 350,000. The following are the assets of Mendoza’s business. Book Value Market Value Equipment (net if accumulated depreciation of Php. 25,000 Php. 350,000 Php. 300,000 Support Equipment (net of accumulated depreciation Php. 5,000) 75,000 50,000 Raw materials 35,000 25,000 Franchise Right 150,000 100,000 Total Php. 610,000 Php. 475,000 a. How much is the net worth assuming there is a mortgage note of Php. 150,000 attached to the equipment? b. Will Benita Peña be able to afford to buy the business? c. Make the entry in the books of Peña?
A. Nenita Mendoza, who plans to go abroad, is selling her mini-donut business. Her friend Benita Peña is interested to buy it but can only afford to pay Php. 350,000. The following are the assets of Mendoza’s business.
Book Value
Market Value
Equipment (net if
Php. 350,000
Php. 300,000
Support Equipment (net of accumulated depreciation Php. 5,000)
75,000
50,000
Raw materials
35,000
25,000
Franchise Right
150,000
100,000
Total
Php. 610,000
Php. 475,000
a. How much is the net worth assuming there is a mortgage note of Php. 150,000 attached to the equipment?
b. Will Benita Peña be able to afford to buy the business?
c. Make the entry in the books of Peña?
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