Portions of the 20X2 financial statements of William€™s Company, a paint manufacturer, are reproduced below (in thousands of dollars):
Partial Income Statement for the year ended 31 December 20X2
Net sales ..............$ 2,266,732
Total expenses........... 2,079,455
Income before income tax...... 187,277
Income tax ............64,611
Net income .............$ 122,666
Property, Plant, and Equipment. Property, plant, and equipment are stated on the basis of cost. Depreciation is provided principally by the straight- line method. he major classes of assets and ranges of depreciation rates are as follows:
Buildings ..................2%€“ 6%
Machinery................. 4%€“ 20%
Furniture and fixtures............ 5%€“ 20%
Automobiles and trucks ............10%€“ 33%

Required:
1. What method of depreciation is used by Williams?
2. What are the average estimated useful lives of buildings owned by Williams?
3. What percentage of the useful life of buildings remains, on average, at the end of the year?
4. What is the book value of machinery retired in the year?
5. Depreciation on buildings and machinery was what percentage of
(a) Total expenses and
(b) Pretaxearnings?

Transcribed Image Text:

Begining Additions Other Cost Additions Retirements Ending Buildings $191,540 $11,574 (960) ($7,185) $194,969 Machinery 404,156 43,968 16,319) 466 432,271 Total Accumulated Depreciation Beginning Additions Retirements Other Ending Buildings 62,843 $7,422 (769) ($4,951) 64,545 Machinery 211,662 37,085 12,302) (845) 235,600