Peter Owns the Train Store Which He Is Trying to Sell

question 56

Multiple Choice

Peter owns The Train Store which he is trying to sell so that he can retire and travel. The Train Store owns the building in which it is located. This building was built at a cost of $427,000 and is currently appraised at $575,000. The display counters and fixtures originally cost $87,000 and are currently valued at $49,000. The inventory is valued on the statement of financial position at $289,000 and has a retail market value equal to 1.4 times its cost. Peter expects the store to collect 97 % of the $48,041 in accounts receivable. The firm has $11,200 in cash and has total debt of $167,400. What is the market value of this firm?

• A) $771,000
• B) $907,800
• C) $919,000
• D) $945,800
• E) $957,000

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Definitions:

Multiple Products

The practice of producing or selling more than one type of product by a single firm, often to diversify market reach and revenue sources.

Activity-based Costing

An approach to cost allocation where overhead and indirect costs are apportioned to corresponding products and services according to the activities they necessitate.

Indirect Labor

Labor costs not directly tied to the production of specific goods or services, such as maintenance and cleaning staff.

Activity Pools

Groups of individual tasks or work processes that are categorized together to allocate costs in activity-based costing.