S7-1. (Learning Objective 2: Determining cost and book value of a company’s PPEs) Examine Round Rock’s assets.

1. What is Hard Stone’s largest category of assets? List all 20X7 assets in the largest category and their amounts as reported by Hard Stone.
2. What was Hard Stone’s cost of property and equipment at May 31, 20X7? What was the book value of property and equipment on this date? Why is book value less than cost?

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A1 B 1 Hard Stone Corporation Consolidated Balance Sheets (Partial, Adapted) 2 (In millions) May 31, 20X7 May 31, 20X6 3 Assets 4 Current assets 5 Cash and cash equivalents $ 2,098 $ 246 6 Receivables, less allowances of $144 and $125 2,772 2,610 7 Spare parts, supplies and fuel 4,670 4,510 190123456789 Prepaid expenses and other 468 411 Total current assets 10,008 7,777 10 Property and equipment, at cost Aircraft 2,394 2,394 Package handling and ground support equipment 12,225 12,139 Computer and electronic equipment 28,165 26,115 Vehicles 586 453 22222 25 Facilities and other Total cost Less: Accumulated depreciation Net property and equipment 19 Other long-term assets 20 Goodwill 21 Prepaid pension cost 1,435 1,594 44,805 42,695 (14,903) (12,942) 29,902 29,753 724 724 1,341 1,275 Intangible and other assets 324 329 23 Total other long-term assets 2,389 2,328 24 Total assets $ 42,299 $ 39,858