Course Project, Notes to Consolidated Financial Statements Essay

1347 Words Nov 6th, 2012 6 Pages
Notes to Consolidated Financial Statements
Note 1
Business and Summary of Significant Accounting Principles (10 items)

Description of Business
The Open-Road Motorcycle Company is the largest online retailer of salvage title motorcycles. We are focused on bringing the customer the best value on entry level motorcycles by providing lower prices than our competitors. Our motorcycles are sold all over the United States, and we currently have 30 stores all across the country.

Property, Plant and Equipment
All property, plant and equipment are stated at cost and depreciated over their useful lives. All depreciation expense incurred is derived using the straight line method. We do not depreciate our land. We estimate our useful life
…show more content…
Inventories are valued at the lower of cost or market. We base our cost on the average cost method. Repaired motorcycles have title and labor costs included in the basis of valuation. Inventories consisted of the following (in millions):
December 31, 2011 2010

Salvage motorcycle inventory $ 300 $310
Repaired motorcycle inventory $250 $200

Total inventories $550 $510

Note 3
Property, Plant and Equipment

The following table illustrates our property, plant and equipment (in millions):
December 31, 2011 2010
Land $ 600 $ 550
Buildings and garages 900 700
Machinery, repair and
Open Document