Question

Burnt Red Company Balance Sheet December 31, 20Y2 Assets Total current assets $350,000 Replacement Cost Accumulated Depreciation Book Value Property, plant, and equipment: Land $250,000 $50,000 $200,000 Buildings 450,000 160,000 290,000 Factory equipment 375,000 140,000 235,000 Office equipment 125,000 60,000 65,000 Patents 90,000 Goodwill 60,000 10,000 50,000 Total property, plant, and equipment $1,350,000 $420,000 $930,000 1. Fixed assets should be reported at 2. Land 3. Patents and goodwill should be 4, Goodwill should be Calculator eBook Chapter 10 Burnt Red Company Balance Sheet December 31, 20Y2 Assets Total current assets Book Value Accumulated Depreciation Replacement Cost Property, plant, and equipment: $200,000 $50,000 $250,000 Land 290,000 160,000 450,000 Buildings 140,000 235,000 375,000 Factory equipment book value. 65,000 125,000 60,000 Office equipment 90,000 90,000 Patents cost. 50,000 60,000 10,000 Goodwill net value. $1,350,000 replacement cost. $420,000 $930,000 Total property, plant, and equipment none of these. 1. Fixed assets should be reported at 2. Land 3. Patents and goodwill should be 4. Goodwill should be Check My Work Calculator eBook Chapter 10 Burnt Red Company Balance Sheet December 31, 20Y2 Assets $350,000 Total current assets Book Value Accumulated Depreciation Replacement Cost Property, plant, and equipment: $200,000 $50,000 $250,000 Land 290,000 160,000 450.000 Buildings 235,000 140,000 375,000 Factory equipment 60,000 65,000 125,000 Office equipment 90,000 does not depreciate. Patents 0,000 50,000 Goodwill is listed as a current asset. 0,000 $930,000 $1,3 s listed under intangible assets. Total property, plant, and equipment is amortized. none of these. 1. Fixed assets should be reported at 2. Land 3. Patents and goodwill should be 4. Goodwill should be Check My Work Chapter 10 Calculator eBook Burnt Red Company Balance Sheet December 31, 20Y2 Assets $350,000 Total current assets Book Value Accumulated Depreciation Replacement Cost Property, plant, and equipment: $250,000 $50,000 $200,000 Land 450,000 160,000 Buildings 290,000 375,000 Factory equipment 140,000 235,000 Office equipment 125,000 60,000 65,000 Patents 90,000 90,000 Goodwill listed under current liabilities. 50,000 Total property, plant, and equipment listed under property, plant, and equipment. $930,000 listed under current assets. listed under intangible assets. 1. Fixed assets should be reported at none of these. 2. Land 3. Patents and goodwill should be 4. Goodwill should be Check My Work Chapter 10 Calculator eBook Burnt Red Company Balance Sheet December 31, 20Y2 Assets $350,000 Total current assets Accumulated Depreciation Book Value Replacement Cost Property, plant, and equipment: $250,000 $200,000 $50,000 Land 450,000 160,000 290,000 Buildings 375,000 140,000 235,000 Factory equipment Office equipment 125,000 60,000 65,000 Patents 90,000 90,000 Goodwill 60,000 10,000 50,000 $1,35 Total property, plant, and equipment 20,000 $930,000 amortized. depreciated. listed as a current asset. 1. Fixed assets should be reported at written down upon impairment. 2. Land 3. Patents and goodwill should be none of these. 4. Goodwill should be Check My Work Chapter 10 eBook Calculator Fixed asset turnover ratio Amazon.com, Inc. is the world's leading Internet retailer of merchandise and media. Amazon also designs and sells electronic products, such as e-readers. Netflix, Inc. is the world's leading Internet television network. Both companies compete in the digital media and streaming space. However, Netflix is more narrowly focused in the digital streaming business than ist Amazon. Sales and average book value of fixed assets information (in millions) are provided for Amazon and Netflix for a recent year as follows: Amazon Netflix Sales $107,006 $6,780 Average book value of fixed assets 19,403 162 a. Compute the fixed asset turnover ratio for each company. Round to one decimal place. Fixed Asset Turnover Ratio Amazon Netflix b. Which company is more efficient in generating sales from fixed assets? C. B Amazon calculations above which of the following is true? ence in their fixed asset turnover ratios because Netilx does not require significant investment in fixed asset as compared to Amazon. This is primarily due to the difference in business. Netflix 2. The difference in their fixed asset turnover ratios because Amazon does not require significant investment in fixed asset as compared to Netflix. This is primarily due to the difference in 3. The difference in their fixed asset turnover ratios because Netfilix is managing its fixed assets more efficiently than Amazon. This is primarily due to the difference in their management. 4. The difference in their fixed asset turnover ratios because Amazon is managing its fixed assets more efficiently than Netflix. This is primarily due to the differencee in their management their core business. Ilenakeangrogress-false Chapter 10 eBook Caloulaton encrtmgTeT Amazon. Sales and average book value of fxed assets information (in milions) are provided for Amazon and Netfix for a recent year as follows Amazon Netflix Sales $107,006- $6,70 Average book value of fixed assets 19,403 162 a. Compute the fixed asset turnover ratio for each company. Round to one decimal place. Fixed Asset Turnover Ratio Amazon Netflix b. Which company is more efficient in generating sales from fixed assets? c. Based on your calculations above which of the following is true? rence in their fixed asset turnover ratios because Netfilx does not require significant investment in fixed asset as compared to Amazon. This is primarily due to the difference in 1 e business 1. rence in their fixed asset turnover ratios because Amazon does not require significant investment in fixed asset as compared to Netflix. This is primarily due to thee difference in e business. 2. rence in their fixed asset turnover ratios because Netflix is managing its fixed assets more efficiently than Amazon. This is primarily due to the difference in their management. rence in their fixed asset turnover ratios because Amazon is managing its fixed assets more efficiently than Netflix. This is primarily due to the difference in their management. 3. " 4. Chapter 10 eBook Caloulator Amazon, Sales and average book value of fixed assets information (in millions) are provided for Amazon and Netfx for a recent year as follows Amazon Netflix Sales $107,006 $6,780 Average book value of fixed assets 19,403 162 a. Compute the fixed asset turnover ratio for each company. Round to one decimal place. Fixed Asset Turnover Ratio aze Netflix b. Which company is mpre efficient in generating sales from fixed assetsh c. Based on your calculationns above which of the following is true? 1. The difference in their fixed asset turnover ratios because Netfilx does not require significant investment in flxed asset as compared to Amazon. This is primarily due to the difference in their core business 2. The difference in their fixed asset turnover ratios because Amazon does not require significant investment in fixed asset as compared to Netfix. This is primarily due to the difference in their core business 3. The difference in their fixed asset turnover ratios because Netflix is managing its fixed assets more efficiently than Amazon. This is primarily due to the difference in their management. 4. The difference in their fixed asset turnover ratios because Amazon is managing its fixed assets more efficiently than Netflix. This is primarily due to the difference in their management Check My Work Previous Next Transactions for fixed assets, including sale Instructions Chart of Accounts Journal Instructions The following transactions and adjusting entries were completed by Legacy Furniture Co. during a three-year period. All are related to the use of delivery equipment. The double-declining-balance.method of depreciation is used. Year 1 Jan. 4 Purchased a used delivery truck for $28,000, paying cash. Nov. 2 Paid garage $675 for miscellaneous repairs to the truck Dec. 31 Recorded depreciation on the truck for the year. The estimated useful life of the truck is four years, withs a residual value of $5,000 for the truck Year 2 Jan. 6 Purchased a new truck for $48,000, paying cash Apr. 1 Sold the used truck purchased on Jan. 4 of Year 1 for $15,000. (Record depreciation to date in Year 2 for the truck.) June 11 Pald garage $450 for miscellaneous repairs to the truck Dec. 31 Record depreciation for the new truck. It has an estimated residual value of $9,000 and an estimated life of five years. Year 3 Instructions Chart of Accounts Journal Instructions Jan. 6 Purchased a new truck for $48,000, paying cash. Apr. 1 Sold the used truck purchased on Jan. 4 of Year 1 for $15,000. (Record depreciation to date in Year 2 for the truck.) June 11 Paid garage $450 for miscellaneous repairs to the truck. Dec. 31 Record depreciation for the new truck. It has an estimated residual value of $9,000 and an estimated life of five years. Year 3 July 1 Purchased a new truck for $54,000, paying cash. Oct. 2 Sold the truck purchased January 6, Year 2, for $16,750. (Record depreciation to date for Year 3 for the truck.) Dec. 31 Recorded depreciation on the remaining truck purchased on July 1. It has an estimated residual value of $12,000 and an estimated useful life of eight years. Journalize the transactions and the adjusting entries. Refer to the Chart of Accounts for exact wording of account titles. Amortization and depletion entries Instructions Starting questions Chart of Accounts Journal Instructions Data related to the acquisition of timber rights and intangible assets during the current year ended December 31 are as follows: A. Timber rights on a tract of land were purchased for $1,600,000 on February 22. The stand of timber is estimated at 5,000,000 board feet. During the current year, 1,100,000 board feet of timber were cut and sold. B. On December 31, the company determined that $3,750,000 of goodwill was impaired. C. Governmental and legal costs of $6,600,000 were incurred on April 3 in obtaining a patent with an estimated economic life of 12 years. Amortization is to be for three-fourths of a year Required: 1. Determine the amount of the amortization, depletion, or impairment for the current year for each of the foregoing items. 2. Journalize the adjusting entries required to record the amortization, depletion, or impairment for each item. Refer to the Chart of Accounts fe exact wording of account titles.