Balance sheet disclosure of long-term assets (Learning Objective 9)

10–15 min.

At the end of 2014, Zorro, Corp., had total assets of $11 million and total liabilities of

$8 million. Included in the assets were property, plant, and equipment with a cost of

$9 million and accumulated depreciation of $3 million. Also included in the assets were

$246,000 of patents, $1,200,000 of goodwill, and $345,000 of other long-term assets.

During 2014, Zorro, Corp., earned total revenues of $23 million and had total expenses of $21 million.

Requirements 1. Show how Zorro, Corp., reported long-term assets on its balance sheet on December 31, 2014.

2. What was the book value of property, plant, and equipment on that date?

AppendixLO1