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The following is a list of account titles and amounts (in millions) reported at December 27, 2015,

Question:

The following is a list of account titles and amounts (in millions) reported at December 27, 2015, by Hasbro, Inc., a leading manufacturer of games, toys, and interactive entertainment software for children and families:

Accounts Receivable Accumulated Amortization Accumulated Depreciation Allowance for Doubtful Accounts Equipment Goodwill


Required:

1. Prepare the asset section of a classified balance sheet for Hasbro, Inc.

2. Using Hasbro’s 2015 Net Sales Revenue of $4,450 (million) and its Net Fixed Assets of $240 (million) at December 28, 2014, calculate the fixed asset turnover ratio for 2015. Has the company generated more or less revenue from each dollar of fixed assets than in 2014, when the ratio was 18.08?

Asset Turnover
Asset turnover is sales divided by total assets. Important for comparison over time and to other companies of the same industry. This is a standard business ratio. Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Transcribed Image Text:

Accounts Receivable Accumulated Amortization Accumulated Depreciation Allowance for Doubtful Accounts Equipment Goodwill $ 415 595 $1,235 840 360 15 Inventories 380 Land Licensing Rights Prepaid Rent Buildings Cash and Cash Equivalents 180 1,860 980 290

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1 Hasbro Inc Excerpts from Balance Sheet December 27 2015 in millions ...View the full answer


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Fundamentals of Financial Accounting

Fundamentals of Financial Accounting

ISBN: 978-1259864230

6th edition

Authors: Fred Phillips, Robert Libby, Patricia Libby

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Depreciation of non-current assets is the process of allocating the cost of the asset over its useful life. The cost of the asset includes the purchase price, any additional costs incurred to bring the asset to its current condition and location, and any other costs that are directly attributable to the asset. The useful life of the asset is the period over which the asset is expected to be used by the company. To calculate the depreciation, companies use different methods such as straight-line, declining-balance, sum-of-the-years\'-digits, units-of-production, and group depreciation. The chosen method will depend on the type of asset, the company\'s accounting policies, and the accounting standards that are applicable. The straight-line method allocates an equal amount of the asset\'s cost over its useful life, while the declining-balance method calculates depreciation at a fixed rate, typically double the straight-line rate, but the amount of depreciation decreases over time. The sum-of-the-years\'-digits method is similar to the declining-balance method, but the rate of depreciation is calculated using a fraction that is based on the useful life of the asset. It\'s important to note that the depreciation expense will be recorded on the company\'s income statement and the accumulated depreciation will be recorded on the company\'s balance sheet. This will decrease the value of the asset on the balance sheet over time.

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