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 ago

Next > < Previous

Related Solutions

James wants to buy a house worth $1,000,000. To do so, he takes out a mortgage...

James wants to buy a house worth $1,000,000. To do so, he takes out a mortgage loan equal to the price of the house. The mortgage has to be repaid after 15 years and make monthly payments with an APR of 10%. Given this information, answer the following (a) 5 points. Draw the timeline that describes all cash flows (paid and received) throughout the duration of the loan. On the timeline, you must also indicate what is the last period/payment!...

Alpha Corp. has decided to take out a large corporate loan topurchase new equipment. The...

Alpha Corp. has decided to take out a large corporate loan to purchase new equipment. The firm will finance $3.25 million over 10 years at 6.75% APR through MegaBank. How much are the monthly payments for Alpha?Select one:$16,453$41,562$37,318$28,911$27,083

(i) Abel Rufus Company owns equipment that is worth substantially more than they originally cost. In...

(i) Abel Rufus Company owns equipment that is worth substantially more than they originally cost. In an effort to provide more relevant information, Abel Rufus reports the equipment at market value in its accounting reports. (ii) Nairobi Holdings Company includes in its accounting records only transaction data that can be expressed in terms of money. (iii) Wambui the managing directors of Wambui Club, records his personal living costs as expenses of the Cantina. Required; For each of the three situations,...

Ben owns 1,000 shares of XYZ corp. worth $10,000. During the year he receives an additional...

Ben owns 1,000 shares of XYZ corp. worth $10,000. During the year he receives an additional 200 shares of this stock as a stock dividend. His shares are now worth $12,500. How much income does Ben have to income in income because of the stock dividend?

Manufacturing Corp. owns a five-acre parcel of land. Its factory takes up one acre of this...

Manufacturing Corp. owns a five-acre parcel of land. Its factory takes up one acre of this land, and there is a mall on the other four acres. Manufacturing Corp. rents out retail space in the mall. To get rid of a troublemaker shareholder, Manufacturing Corp. wants to put all of the land into a subsidiary, sign a long-term lease for its own factory, and then split off this subsidiary by transferring it to the troublemaker shareholder in complete redemption of...

Lanni Products is a start up computer software development firm. It currently owns computer equipment worth...

Lanni Products is a start up computer software development firm. It currently owns computer equipment worth $30,000 and has cash on hand of $20,000 contributed by Lanni’s owners. For each of the following transactions, identify the real and/or financial assets that trade hands. Are any financial assets created or destroyed in the transaction? a. Lanni takes out a bank loan. It receives $50,000 in cash and signs a note promising to pay back the loan over three years. b. Lanni...

A borrower takes a cash-out to refinance for 80% of the existing property value. The property...

A borrower takes a cash-out to refinance for 80% of the existing property value. The property is currently valued at $250,000, and the outstanding amount of the existing mortgage is $60,000. The new loan will be a 2/1 ARM with an initial interest rate of 2.625% and a 30-year term. The first two years will require only interest payments. What is the total amount in $dollars that the borrower will pay in interest during the first two years of the...

A borrower takes a cash-out to refinance for 80% of the existing property value. The property...

A borrower takes a cash-out to refinance for 80% of the existing property value. The property is currently valued at $250,000, and the outstanding amount of the existing mortgage is $60,000. The new loan will be a hybrid 5/1 ARM with an initial interest rate of 2.625% and a 30-year term. What is the total amount in $dollars that the borrower will pay in interest during the first five years of the loan? Round to two decimals.

A borrower takes a cash-out to refinance for 80% of the existing property value. The property...

A borrower takes a cash-out to refinance for 80% of the existing property value. The property is currently valued at $250,000, and the outstanding amount of the existing mortgage is $60,000. The new loan will be a hybrid 5/1 ARM with an initial interest rate of 2.625% and a 30-year term. What is the total amount in $dollars that the borrower will pay in interest during the first five years of the loan? Round to two decimals.

Lanni Products is a start-up computer software development firm. It currently owns computer equipment worth $32,000...

Lanni Products is a start-up computer software development firm. It currently owns computer equipment worth $32,000 and has cash on hand of $16,000 contributed by Lanni’s owners. Lanni takes out a bank loan. It receives $46,000 in cash and signs a note promising to pay back the loan over 3 years. a-1. Prepare the balance sheet just after it gets the bank loan. Assets Liabilities & Shareholders' Equity Cash Bank loan Computers Shareholders' equity Total Total a-2. What...

Subjects