Escolar Documentos
Profissional Documentos
Cultura Documentos
$ 2,392
12,229
28,159
Vehicles.
581
1,432
Total cost..
Less: Accumulated depreciation.
Net property and equipment
2.
44,793
(14,900)
$29,893
Cost
= $44,793 million
Book value = $29,893 million
Book value is less than cost because accumulated depreciation is subtracted from
cost to compute book value.
Chapter 7
(5 min) S 7-2
63,000
21,000
126,000
210,000
*Supporting computations:
Current
Market
Value
Percent of Total
Land.
$ 66,000
$66,000 / $220,000
30.0%
Building...
22,000
$22,000 / $220,000
10.0%
Equipment..
132,000
$132,000 / $220,000
60.0%
Total.
$220,000
100.0%
(5 min.) S 7-3
Income Statement
Revenues
CORRECT
Expenses
UNDERSTATED
Net income
OVERSTATED
$ 7,800,000
$ 4,350,000
$17,760,000
Second-year depreciation:
Straight-line ($44,400,000 $5,400,000) / 5 years.............
$ 7,800,000
$ 7,350,000
$10,656,000
2. Book value:
StraightLine
Cost
Less: Accumulated
Depreciation
Book value, Year 1..
$44,400,000
(7,800,000)
$36,600,000
Chapter 7
Units-ofProduction
$44,400,000
(4,350,000)
$40,050,000
DoubleDecliningBalance
$44,400,000
(17,760,000)
$26,640,000
$17,760,000
(7,800,000)
$ 9,960,000
.36
$ 3,585,600
1,790,000
2,685,000
4,100,000
15,000
15,000
Assets remaining
depreciable
book value
(New) Estimated
useful life remaining
(New) Annual
depreciation
$90,000 $45,000
3 years
$45,000
Cash...........
Accumulated Depreciation...
Loss on Sale of Airplane...
Airplane.
Chapter 7
8,000,000
29,500,000
30,350,000
67,850,000
2.
Billions
14.4
14.4
Billions
3.
3.6
3.6
Req. 2
$12.0
(10.0)
2.0
$6.2
In future years, PTL, Inc. will determine whether its goodwill has been impaired. If
the goodwills value has not been impaired, there is nothing to record. But if
goodwills value has been impaired, PTL, Inc. will record a loss and write down the
book value of the goodwill.
(5 min.) S 7-11
(Dollar amounts in millions)
Return on assets
15%
=
=
Net income
$18
(5 min.) S 7-12
2012 Return on assets
Net income
17.7%
$42,500
$240,000
Net income
18.0%
$45,000
$250,000
(5 min.) S 7-13
Millions
Chapter 7
$(15.0)
Capital expenditures.........
(8.0)
13.0
$(10.0)
(5 min.) S 7-14
Asset
a.
b.
c.
d.
Equipment
Trademark
Land
Factory
building
Book
Value
$160,000
$320,000
$56,000
$3 million
Estimated
Future Cash
Flows
$120,000
$420,000
$30,000
$3 million
Fair
Value
$100,000
$380,000
$28,000
$2 million
Impaired?
(Y or N)
Y
N
Y
N
Amount
of Loss
$60,000
-$28,000
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