Reference no: EM13492356

Problem 1

The following is a list of account titles and amounts (dollars in millions) reported by Hasbro, Inc., a leading   manufacturer of games, toys, and interactive entertainment software for children and families:

Buildings and improvements                    $206              goodwill     $   464 Prepaid expenses and other                                             machinery and equipment    304         Current assets                                        212              accumulated depreciation     358 Allowance for doubtful accounts                  39               inventories                               169 Other noncurrent assets                                 280         other intangibles                     1,146 Accumulated amortization                                             land and improvements           18      (other intangibles)                      435             accounts receivable                  646 Cash and cash equivalents                            521             tools, dies, and molds                30

Required:

Prepare the asset section of the balance sheet for Hasbro, Inc., classifying the assets into Current Assets, property, plant, and Equipment (net), other Assets.

Problem 2

Computing Depreciation and Book value for Two Years Using Alternative Depreciation Methods and Interpreting the Impact on Cash Flows

Daisey Company bought a machine for $66,000 cash. The estimated useful life was four years, and the estimated residual value was $6,000. Assume that the estimated useful life in productive units is120,000. Units actually produced were 43,000 in year 1 and 45,000 years 2.

Required:

1. Determine the appropriate amounts to complete the following schedule. Show computations andround to the nearest dollar.

Depreciation Expense for             Net Book Value at the End

Method of Depreciation                      Year 1                Year 2                                  Year 1            Year 2

Straight-line Units-of-production Double-declining- balance 2. Which method would result in the lowest EPS for year 1? For year 2?

Problem 3

Recording the disposal of an asset three different sale prices

Federal express is the world's leading express-distribution company. In addition to the world's largest fleet of all-cargo aircraft, the company has more than 669 aircraft and 53,000 vehicles and trailers that pick up and deliver packages. Assume that Federal Express sold a small delivery truck that had been used in the business for three years. The record of the company reflected the following:

                                        Delivery truck cost                       $28,000

                                        Accumulated depreciation         $23,000

Required:

1. Give the journal entry for the disposal of the truck, assuming that the truck sold for

a.       $5,000

b.      $5,600

c.       $4,600     

2. Based on the three preceding situations, explain the effects of the disposal of an asset.

Problem 4

Evaluating the effect of alternative depreciation methods on key ratios form analyst perspective

You are a financial analyst for General Motors and have been asked to determine the impact of alternative depreciation methods. For your analysis, you have been asked to compare methods based on a machine that cost $93,000. The estimated useful life is 13 years, and the estimatedresidualvalue is $2,000. The machine has an estimated useful life in productive output of 182,000 units.Actual output was 20,000 in year 1 and 16,000 in year 2. (Round results to the nearest dollar.)

Required:

1. For years 1 and 2 only, prepare separate depreciation schedules assuming:

a. Straight-line method.

b. Units-of-production method.

c. Double-declining-balance method.

Method:                                                        Depreciation             Accumulated                        Net Year Computation           Expense                    Depreciation                Book value

At acquisition            1            2