Question

E9-1 Preparing a Classified Balance Sheet [LO 9-1, LO 9-7] The following is a list of account titles and amounts (in millions) reported at December 27, 2015, by Hashey, Inc. a leading manufacturer of games, toys, and interactive entertainment software for children and families: $1,104 Equipment 739 Goodwill Accounts Receivable Accumulated Amortization $ 484 589 Accumulated Depreciation Allowance for Doubtful Accounts Buildings Cash and Cash Equivalents 494 Inventories 344 34 Land 234 Licensing Rights 674 Prepaid Rent 12 1,861 349 Required: 1. Prepare the asset section of a classified balance sheet for Hashey, Inc. 2. Using Hasbro's 2015 Net Sales Revenue of $4,580 (million), its Net Fixed Assets of $224 (million) at December 28, 2014, and its Net Fixed Assets computed at December 27, 2015, calculate the fixed asset turnover ratio for 2015

Answer 1

Solution Required 1: HASHEY, INC. Balance Sheet (Partial) December 27, 2015 (in millions) Assets Current Assets: Cash and Cash Equivalents Accounts Receivable Allowance for Doubtful Accounts I Inventory Prepaids $674 $1,104 $1,070 $3441 $349 $2,437 Total Current Assets Property, plant, and Equipment Land Equipment Buildings $12 $484 $234 $730 ($494) $236 Property, plant, and Equipment (at cost) Accumulated Depreciation Total Property, Plant, and Equipment (net) Other Assets Licensing Rights Accumulated Amortization Goodwill $1,861 ($739) $589 Total Other Assets Total Assets $1,711 $4,384

Required 2: Net sales revenue for 2015 (in millions) $4,580 Net Fixed Assets at Dec. 28, 2014 (in millions) Net Fixed Assets at Dec. 27, 2015 (in millions) Average fixed assets (in millions) {($224M+$236M)/2} $224 $236 $230 Fixed Assets Turnover Ratio = Net sales / Average Fixed Assets = $4,580 Millions / $230 Millions = 19.91 Fixed Assets Turnover Ratio 19.91 Required 3: The fixed assets turnover ration in 2014 was 18.38, which has increased in 2015 to 19.91. This indicates that the company generated more revenue from each dollar of fixed assets than in 2014. More Revenue