The majority of long-term assets consist of property, plant, and equipment and i
ID: 2369057 • Letter: T
Question
The majority of long-term assets consist of property, plant, and equipment and intangibles. These assets are capitalized on the balance sheet and depreciated on the income statement over their estimated useful lives.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
Refer to the annual report of BANK OF AMERICA (BAC) to analyze. Research and answer the following:
1. What are the balances of net property, plant, and equipment on December 31, 2008 and 2009?
2. Referring to the notes to the financial statements, what depreciation methods didBANK OF AMERICAuse? What were the estimated useful lives of the assets? What kinds of intangible assets doesBANK OF AMERICAown?
3. What was the percent of net fixed assets compared to total assets forBANK OF AMERICAfor 2008 and 2009?
Explanation / Answer
CHARLOTTE, N.C., Jan 20, 2010 /PRNewswire via COMTEX/ -- Net Loss of $194 Million in Fourth QuarterOne-Time $4 Billion TARP Repayment Cost Impacts Income Applicable to Common ShareholdersStrong Annual Sales and Trading ResultsExtends $177 Billion in Credit in the Fourth Quarter and $756 Billion in 2009
Bank of America Corporation today reported full-year 2009 net income of $6.3 billion, compared with net income of $4.0 billion in 2008. Including preferred stock dividends and the negative impact from the repayment of the U.S. government's $45 billion preferred stock investment in the company under the Troubled Asset Relief Program (TARP), income applicable to common shareholders was a net loss of $2.2 billion, or $0.29 per diluted share.
Those results compared with 2008 net income applicable to common shareholders of $2.6 billion, or $0.54 per diluted share.
In the fourth quarter of 2009, the company's net loss narrowed to $194 million from a loss of $1.8 billion a year earlier. Including dividends on preferred stock and the one-time $4.0 billion negative impact associated with repaying TARP, income applicable to common shareholders in the period was a net loss of $5.2 billion, or $0.60 per diluted share, compared with a net loss of $2.4 billion, or $0.48 per diluted share, in the year-ago quarter.
Results in the fourth quarter reflected continued elevated credit costs, although lower than in the third quarter of 2009. While net interest income declined from the year-ago quarter as a result of lower asset liability management portfolio levels and reduced loan demand, noninterest income was up sharply due to an improvement in trading and significantly higher income from investment and brokerage services, equity investments and investment banking.
"While it's disappointing to report a loss for the fourth quarter, there were a number of important accomplishments worth noting," said Chief Executive Officer and President Brian T. Moynihan. "First, we repaid the American taxpayer, with interest, for the TARP investment. Second, we have taken steps to strengthen our balance sheet through successful securities offerings. And third, all of our non-credit businesses recorded positive contributions to our results.
"As we look at 2010, we are encouraged by signs the economy is improving, as we have seen in the stabilization of our credit costs, particularly in the consumer businesses. That said, economic conditions remain fragile and we expect high unemployment levels to continue, creating an ongoing drag on consumer spending and growth."
Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009 Dec 31, 2008
Land 591 623 658 667 386
Buildings 13,196 12,733 11,945 12,210 9,767
Machinery, equipment and office furnishings 17,188 16,919 15,894 16,174 13,104
Construction in progress 2,440 2,198 2,066 1,818 871
Property, plant and equipment, at cost 33,415 32,473 30,563 30,869 24,128
Accumulated depreciation (17,385) (16,176) (13,481) (12,595) (12,129)
Property, plant and equipment, less accumulated depreciation 16,030 16,297 17,082 18,274 11,999
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