Property, plant, and equipment is normally audited in adifferent manner than current asset accounts. Why is this so?Discuss the differences in how property, plant, and equipment isaudited compared to current assets.
Property, plant, and equipment is normally audited in adifferent manner than current asset accounts. Why is this so?Discuss the differences in how property, plant, and equipment isaudited compared to current assets.
Related questions
Please provide the correct answers. there are several answersand i need the corrects ones.
1.Compute the cost of the property, plant and equipment at theend of the current year.Explain your answer.
2.What was the approximate age of the property, plant andequipment at the end of the current year?
3. Compute the fixed asset turnover ratio for the currentyear.Explain your results.
4. What is the âexcess cost over fair value of assetsacquiredâ?
5. On the consolidated statement of cash flows, why are thedepreciation and amortization amounts added to income fromcontinuing operations?
Christy Company operates in the entertainment industry. In June2013, Christy purchased Mattâs Movies which produces anddistributes various video products. The purchase resulted in $2.7million in goodwill. Since then, Christy has undertaken a number ofbusiness acquisitions and diversifications as the company expands.Selected date from a recent annual report are as follows: ((dollarsin thousands)
Property, Plant & Equipment and Intangibles BalanceSheet | Current Year | Prior Year |
Film cost (net of amortization) | $1,272 | $ 991 |
Artistsâ Contracts and other Entertainment Assets | 761 | 645 |
Property, Plant & Equipment (net) | 2,733 | 2,559 |
Excess of Cost over Fair Value of Assets Acquired | 3,076 | 3,355 |
Accumulated Depreciation on Property, Plant & Equipment | 1,178 | 1,023 |
Income Statement | ||
Total Revenue | 9,714 | 10,644 |
Statement of Cash Flows | ||
Income from Operations | 880 | 445 |
Adjustments | ||
Depreciation | 289 | 265 |
Amortization | 208 | 190 |
Other Adjustments | -1,618 | -256 |
Net Cash provided by Operations | -241 | 644 |
Required
Compute the cost of the property, plant and equipment at the endof the current year.Explain your answer.
What was the approximate age of the property, plant andequipment at the end of the current year?
Compute the fixed asset turnover ratio for the currentyear.Explain your results.
What is the âexcess cost over fair value of assetsacquiredâ?
On the consolidated statement of cash flows, why are thedepreciation and amortization amounts added to income fromcontinuing operations?
Hocking Corporation's comparative balance sheet appearsbelow:
Ending | Beginning | |
Assets: | ||
Current assets: | ||
Cash and cash equivalents | $62,500 | $29,100 |
Accounts receivable | 25,000 | 30,500 |
Inventory | 68,000 | 65,500 |
Prepaid expenses | 13,000 | 15,500 |
Total current assets | 168,500 | 140,600 |
Property, plant and equipment | 367,000 | 344,000 |
Loss accumulated depreciation | 166,000 | 142,000 |
Net property, plant, and equipment | 201,000 | 202,000 |
Total assets | $369,500 | $342,600 |
Liabilities and Stockholder's Equity: | ||
Current liabilities: | ||
Accounts payable | $17,500 | $13,200 |
Accrued liabilities | 65,500 | 55,000 |
Income taxes payable | 54,500 | 51,200 |
Total current liabilities | 137,500 | 119,400 |
Bonds payable | 83,200 | 85,200 |
Total liabilities | 220,700 | 204,600 |
Stockholder's equity: | ||
Common stock | 31,800 | 30,000 |
Retained earnings | 117,000 | 108,000 |
Total stockholder's equity | 148,800 | 138,000 |
Total liabilities and stockholder's equity | $369,500 | 342,600 |
The company's net income (loss) for the year was $11,000 and itscash dividends were $2,000. It did not sell or retire any property,plant, and equipment during the year. The company uses the indirectmethod to determine the net cash provided by operatingactivities.
The company's net cash provided by operating activities is:
$61,100
$48,800
$58,600
$26,500
