Question
In: Finance
Toledo Corp owns construction equipment worth $1.5M and has $500M in cash. Toledo Corp takes out...
Toledo Corp owns construction equipment worth $1.5M and has $500M in cash. Toledo Corp takes out a 5-year loan for $1M. Toledo Corp finances the construction of a new building entirely with cash. The cost of the construction is $1.5M. Please fill out Toledo Corp’s balance sheets shown below. The first balance sheet is before developing the new building and the second balance sheet is after developing the new building.
ANSWER
Toledo Corp’s balance sheets after taking the loan Before constructing the new building:
After constructing the new building:
|
Assets |
Liabilities & Equity |
||
|
Cash |
Debt |
||
|
Equipment |
Equity |
||
|
Total |
Total |
||
|
Assets |
Liabilities & Equity |
||
|
New Building |
Debt |
||
|
Equipment |
Equity |
||
|
Total |
Total |
||
Toledo Corp sells the building to Bechtel for 20,000 Bechtel shares @ $100/share. Please fill out Toledo Corp’s balance sheet after proceeds from the sale of the new building to Bechtel:
|
Assets |
Liabilities & Equity |
||
|
Bechtel shares |
Debt |
||
|
Equipment |
Equity |
||
|
Total |
Total |
||
Solutions
Expert Solution
SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP
PLEASE. CASH IS 500000 AND 500M. 
jeff jeffy answered 1 year agoRelated Solutions
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