Question
For the following, what would be the effect on 2018 Total Assets and Pretax Income. Throughout, assume that Chevy's estimates are accurate. (11 points) For
For the following, what would be the effect on 2018 Total Assets and Pretax Income. Throughout, assume that Chevy's estimates are accurate. (11 points) For example, if the question said, "During 2018, Chevy bought 100 of raw materials inventory for cash," the answer would be:
Total Assets: 0
Pretax Income: 0
g. During 2018, Chevy disposes of obsolete Monz wheel covers that cost 100 to produce. The obsolescence was created by the launch of a new model Monz in 2017, which rendered the old inventory obsolete.
Total Assets:
Pretax Income:
h. During 2018, Chevy launches a new design of the Silverado line that creates 100 of obsolescence in the inventory of seat covers related to the previous model. Chevy anticipates that the old seat covers will be disposed of in 2019.
Total Assets:
Pretax Income:
i. During 2018, Chevy spends 100 in cash to rent a stapling machine used in producing special seat covers. The payments cover rental for two years (2018 and 2019) and the seat covers are included in cars produced in 2018 and 2019 that will be sold in 2019.
Total Assets:
Pretax Income:
j. During 2018, Chevy pays 100 to an early-stage researcher designing self-driving technology. Chevy is exploring the possibility of incorporating self-driving features into potential future electric car models.
Total Assets:
Pretax Income:
k. During 2018, a production employee works on a batch of cars. As a result, her union contract dictates that she has rights to an additional 100 (present-valued) of healthcare when she retires in 2048. Half of the cars she worked on are still in finished goods inventory at year-end 2018.
Total Assets:
Pretax Income:
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