Concept Introduction:
The Balance sheet is a summary of Assets, Liabilities and equity accounts that reports the financial position of the business as on a specific date. Assets are further classifies into Current Assets, Long Term Investments, Plant Assets and Intangible assets. And Liabilities are further classified into Current Liabilities and Long term liabilities.
Requirement-1:
To Calculate:
The Net property, plant, and equipment (book value) for years 1 and 2
Concept Introduction:
The Balance sheet is a summary of Assets, Liabilities and equity accounts that reports the financial position of the business as on a specific date. Assets are further classifies into Current Assets, Long Term Investments, Plant Assets and Intangible assets. And Liabilities are further classified into Current Liabilities and Long term liabilities.
Requirement-2:
To Indicate:
The Comparison between the Net property, plant, and equipment for the years
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Chapter 7 Solutions
CengageNOWv2, 1 term Printed Access Card for Warren's Survey of Accounting, 8th
- Analyze Home Depot The Home Depot (HD) reported the following data (in millions) in its recent financial statements: a. Determine the asset turnover ratio for Home Depot for Year 2 and Year 1. Round to two decimal places. b. What conclusions can be drawn from these ratios concerning the change in the ability of Home Depot to effectively use its assets to generate sales?arrow_forwardVerizon: Fixed asset turnover ratio Verizon Communications Inc. is a major telecommunications company in the United States. Two recent balance sheets for Verizon disclosed the following information regarding fixed assets: End of Year (in millions) Beginning of Year (in millions) Property, plant, and equipment 220,865 209,575 Accumulated depreciation (131,909) (120,933) Property, plant, and equipment (net) 88,956 88,642 Verizons revenue for the year was 120,550 million. Assume the fixed asset turnover ratio for the telecommunications industry averages approximately 1.1. A. Determine Verizons fixed asset turnover ratio. (Round to one decimal place.) B. Interpret this ratio with respect to the industry average.arrow_forwardQuestion Content Area The net income reported on the income statement for the current year was $58,000. Depreciation recorded on fixed assets for the year was $24,000. In addition, equipment with an original cost of $130,000 and accumulated depreciation of $115,000 on the date of the sale was sold for $20,000. Balances of the current asset and current liability accounts at the end and beginning of the year are as follows: End Beginning Cash $65,000 $70,000 Accounts Receivable (net) 70,000 63,000 Inventories 85,000 102,000 Prepaid Expenses 4,000 4,500 Accounts Payable (merchandise creditors) 50,000 58,000 Cash Dividends Payable 4,500 6,500 Salaries Payable 6,000 7,500 Prepare the operating activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.arrow_forward
- The following data (in millions) were adapted from recent annual reports of United Parcel Service, Inc. (UPS). UPS provides delivery and freight services throughout the world. Year 2 Year 1 Vehicles $7,726 $6,927 Aircraft 16,187 16,157 Land 1,173 1,191 Buildings 6,702 6,532 Equipment 9,518 9,049 Construction in progress 306 250 Less accumulated depreciation (22,884) (21,707) a. Compute the net property, plant, and equipment (book value) for Years 1 and 2. Year 2 book value $ Year 1 book value $arrow_forwardRead the following case and calculate the book value of Home Depot's current and prior year fixed assets.Explain the difference in the book value between the two years.Home Depot is a distributor of building materials, gardening and kitchen equipment, among others. The following information is from the company's books. Fixed assets Current year Previous year Buildings $28,300 $21,500 Machinery, equipment, and computer systems 32,250 22,600 Other fixed assets 6,800 8.200 Accumulated depreciation and amortization (31,500) (23,100)arrow_forwardFinancial Statement Presentation Alexa Corp. reported the following amounts for the year just ended: Land $150,000 Patents 25,000 Equipment 40,000 Buildings 150,000 Goodwill 37,000 Accumulated amortization 13,000 Accumulated depreciation 90,000 Prepare a partial balance sheet for these amounts. Property, Plant and Equipment (net) Answer Goodwill Answer Intangible Assets Answerarrow_forward
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- Net income for the current year was $92,150. Depreciation expense was $26,500. The balances of the current asset and current liability accounts at the beginning and end of the year are listed below. End of Year Beginning of Year a) Cash $61,500 56,250 b) Accounts receivable 81,250 74,100 c) Inventories 103,000 81,000 d) Prepaid expenses 6,100 7,600 e) Accounts payable 49,400 51,200 Required: Prepare the cash flows from operating activities section of the statement…arrow_forwardAccounting standard IAS16: Property, Plant and Equipment make a number of recognition, measurement and disclosure requirements with regard to tangible non-current assets. The term "non-current asset" is defined in accounting standard IAS1: Presentation of Financial Statements. The information given below relates to two companies, both of which prepare accounts by 31 December. Tom Limited: Joy Plc bought a factory machine on 30 June 2020 and paid a total of £420,000. The supplier's invoice showed that this sum was made up of the following items: £ Manufacturer's list price 380,000 Less: Trade discount 38,000 342,000 Delivery charge 6,800 Installation costs 29,600 Maintenance charge for a year to 30 June 2021 27,000 Small spare parts 14,600 £420,000 Jerry Limited: On 1 January 2010, Jerry Ltd bought freehold property for £800,000. This figure was made up of land £300,000 and buildings £500,000. The land was non-depreciable…arrow_forwardAccounting standard IAS16: Property, Plant and Equipment make a number of recognition, measurement and disclosure requirements with regard to tangible non-current assets. The term "non-current asset" is defined in accounting standard IAS1: Presentation of Financial Statements. The information given below relates to two companies, both of which prepare accounts by 31 December. Tom Limited: Joy Plc bought a factory machine on 30 June 2020 and paid a total of £420,000. The supplier's invoice showed that this sum was made up of the following items: £ Manufacturer's list price 380,000 Less: Trade discount 38,000 342,000 Delivery charge 6,800 Installation costs 29,600 Maintenance charge for a year to 30 June 2021 27,000 Small spare parts 14,600 £420,000 Jerry Limited: On 1 January 2010, Jerry Ltd bought freehold property for £800,000. This figure was made up of land £300,000 and buildings £500,000. The land was non-depreciable…arrow_forward
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