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leth 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: 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. Book Value Market

leth 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: 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. Book Value Market

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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:

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.

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,

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