Consider Keller Company. Total liabilities= $600,000; Equity is 1/2 of Total Liabilities.
a. Measure Keller's Total Assets on the balance sheet.
b. Keller must settle an off-book liability for $1,000,000 due to a lawsuit; and the market value of its Total Assets is 5 times the value of its Total Assets on the book or the balance sheet.
i. How much is the market value of Keller's Total Assets?
ii. Is the company solvent or insolvent? Why? Show math for credit.