Company acae Accounting II Company Analysis Project Plant and Equipment Question

Question

Company acae Accounting II Company Analysis Project Plant and Equipment Questions Refer to the notes to the financial statements. The first note, "Summary of Significant Accounting Policies," provides information about the company's depreciation and amortization methods. You will also need to refer to the other notes to the financial statements and to the financial statements themselves in order to answer the following questions Property, plant, and equipment 1. What depreciation method does the company use? 2. What is the amount of depreciation expense? (Hint: Look at the operating activities section of the cash flow statement if the indirect method was used) a. Current year b. Prior year Does the company report any intangible assets? What is the dollar amount Does the company report any goodwill? If so, how much List the Long-Lived assets 2. 3. 4 ANALYSIS 5. Calculate the following for the most current year: Show your computations. a. Average useful life of plant assets Cost of plant assets/Depreciation expense b. Average age of plant assets Accumulated Depreciation/ Depreciation Expense C. Asset turnover Sales / Average Assets = d. Return on assets = Net income/ Average Assets

Explanation / Answer

1. Company use the straight line method for depreciation of assets.

2. Depreciation expense:

Current Year - 2,298 Million

Prior Year - 2,213 Million

2. Company does not report any intangible asset.

3. No goodwill is seen in the financlal statements of the company. However, we have not been provided notes to accounts and therefore, the same cannot be commented upon.

4. Long lived assets - 1. Land 2. Building & improvements. 3. Fixtures & equipment 4. Computer Hardware & Sotware

NOTE: Construction in progress is considered to be WIP till it is fully constructed. Once it is fully constructed, it can be considered as long lived asset and will be depreciated.

5. Foor completing the 5th part, we need notes to account for working out the individual depreciation on plants and as a result the same cannot be determined.

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