MyLab Accounting with Pearson eText -- Access Card -- for Financial Accounting
12th Edition
ISBN: 9780134727677
Author: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.
Publisher: PEARSON
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Chapter 7, Problem 7.71AP
(Learning Objectives 1, 3, 4, 6, 8: An21yze plant asset tr2nsactions from a company’s financial statements) Savanaugh Stores, Inc., sells electronics and appliances. The excerpts that follow are adapted from Savanaugh’s financial statements for 2018 and 2017
| March 31, | ||
| 2018 | 2017 | |
| Assets | ||
| Total current assets............................... | $7,986 | $6,906 |
| Property, plant, and equipment............. | 1,833 | 1,196 |
| Less: |
2,129 | 1,723 |
| 552 | 512 | |
| Year Ended | ||
| March 31. | ||
| Statement of Cash Flows (dollars in millions) | 2018 | 2017 |
| Operating activities: | ||
| Net income.................................................................. | $1,149 | $989 |
| Noncash items affecting net income: | ||
| Depreciation............................................................. | 473 | 460 |
| Gain on sale of property, plant and equipment.......... | (142) | 0 |
| Investing activities: | ||
| Additions to property, plant, and equipment............... | (712) | (616) |
| Sale of property, plant and equipment.......................... | 150 | 0 |
Requirements
- 1. How much was Savanaugh’s cost of plant assets at March 31, 2018? How much was the book value of plant assets? Show computations.
- 2. The financial statements provide three pieces of evidence that Savanaugh purchased plant assets and goodwill during fiscal year 2018. What are they?
- 3. Prepare T-accounts for Property, Plant, and Equipment: Accumulated
Depreciation: and Goodwill. Then fill in the T-accounts with information from the comparative balance sheets and cash flow statements. Label each increase or decrease and give its dollar amount. - 4. Prepare the
journal entry for the sale of property, plant, and equipment in 2018.
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Chapter 7 Solutions
MyLab Accounting with Pearson eText -- Access Card -- for Financial Accounting
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