I want to understand how to get the numbers in question 1. (req 1.-(a)(b)

(c) )

Homework #7 Chapter 8 Homework Problems E8-1 Preparing a Classified Balance Sheet LO1 The following is a list of account titles and amounts (in millions) reported by Hasbro, Inc., a leading manufacturer of games, toys, and interactive entertainment software for children and families: Buildings and Improvements Prepaid Expenses and Other Current Assets Allowance for Doubtful Accounts Other Noncurrent Assets Accumulated Amortization (other intangibles) Cash and Cash Equivalents $ 197 319 64 131 192 178 Goodwill Machinery and Equipment Accumulated Depreciation Inventories Other Intangibles Land and Improvements Accounts Receivable Tools, Dies, and Molds $ 704 296 227 335 1,030 15 1,022 50 Required: Prepare the asset section of the balance sheet for Hasbro, Inc., classifying the assets into Current Assets, Property, Plant, and Equipment (net), and Other Assets. Hasbro, Inc. Excerpts from Balance Sheet (in millions) ASSETS Current Assets Cash and Cash Equivalents Accounts Receivable Less: Allowance for Doubtful Accounts Inventories Prepaid Expenses and Other Current Assets Total Current Assets Property, Plant, and Equipment Tools, Dies and Molds Machinery and Equipment $ 178 $ 1,022 64 958 335 319 1,790 50 296 Buildings and Improvements Land and Improvements 197 15 Property, Plant, and Equipment (at cost) Less: Accumulated Depreciation 558 227 Total Property, Plant, and Equipment (net) 331 Other Assets Goodwill Other Intangibles Less: Accumulated Amortization Other Intangibles, net of Accumulated Amortization Other Noncurrent Assets 704 1,030 192 838 131 Total Other Assets 1,673 Total Assets $ 3,794 E8-8 Computing Depreciation under Alternative Methods LO3 Alexa Plastics Company purchased a new stamping machine at the beginning of the year at a cost of $240,000. The estimated residual value was $28,800. Assume that the estimated useful life was 5 years, and the estimated productive life of the machine was 251,000 units. Actual annual production was as follows: Year 1 2 3 4 5 Required: Units 77,000 62,000 29,000 43,000 40,000 1. Complete a separate depreciation schedule for each of the alternative methods. a. Straight-line. b. Units-of-production. c. Double-declining-balance. 2. Assuming that the machine was used directly in the production of one of the products that the company manufactures and sells, what factors might management consider in selecting a preferable depreciation method in conformity with the matching principle? Round your answers to the nearest whole dollar amount. Calculate the cost per unit in the units of production method to 6 decimal places. Req. 1 a. Straight-line: $ 42,240 84,480 126,720 168,960 211,200 Net Book Value $ 240,000 197,760 155,520 113,280 71,040 28,800 b. Units-of-production:$ 0.841434per unit of output Depreciation Accumulated Year Expense Depreciation At acquisition 1 $ 64,790 $ 64,790 2 52,169 116,959 3 24,402 141,361 4 36,182 177,543 5 33,657 211,200 Net Book Value $ 240,000 175,210 123,041 98,639 62,457 28,800 Year At acquisition 1 2 3 4 5 Depreciation Expense $ 42,240 42,240 42,240 42,240 42,240 Accumulated Depreciation c. Double-declining-balance: Year At acquisition 1 2 Depreciation Expense $ 96,000 57,600 Accumulated Depreciation $ 96,000 153,600 Net Book Value $ 240,000 144,000 86,400 3 4 5 34,560 20,736 2,304 188,160 208,896 211,200 51,840 31,104 28,800 Req. 2 If the machine is used evenly throughout its life and its efficiency (economic value in use) is expected to decline steadily each period over its life, then straight-line depreciation would be preferable. If the machine is used at a consistent rate but the efficiency is expected to decline faster in the earlier years of its useful life, then an accelerated method would be appropriate [such as, double-declining-balance]. If the machine is used at different rates over its useful life and its efficiency declines with output, then the units-of-production method would be preferable because it would result in a better matching of depreciation expense with revenue earned. For income tax purposes, accelerated methods may be advantageous, because an earlier tax deduction is preferable to a later tax deduction because of the time value of money. However, accelerated methods may not satisfy the matching principle. E8-13 Recording the Disposal of an Asset at Three Different Sale Prices LO5 Federal Express is the world's leading express-distribution company. In addition to the world's largest fleet of all-cargo aircraft, the company has more than 45,500 ground vehicles and trailers that pick up and deliver packages. Assume that Federal Express sold a small delivery truck that had been used in the business for three years. The records of the company reflected the following: Delivery Truck Accumulated Depreciation $ 28,000 23,200 Required: Give the journal entry for the disposal of the truck, assuming the following (omit the "$" sign in your response): (a) The sales price was $4,800. General Journal Cash Accumulated Depreciation Delivery Truck (b) The sales price was $5,400. General Journal Cash Accumulated Depreciation Gain on Sale of long-lived asset Delivery Truck (c) The sales price was $4,400. General Journal Cash Accumulated Depreciation Loss on Sale of long-lived asset Delivery truck Debit Credit 4,800 23,200 28,000 Debit Credit 5,400 23,200 600 28, Debit Credit 4,400 23,200 400 28,000 E8-16 Computing the Acquisition and Depletion of a Natural Resource LO6 Freeport-McMoRan Copper & Gold, Inc. is one of the world's largest copper and gold mining and production companies with a majority of its natural resources in Indonesia. Annual revenues exceed $2.2 billion. Assume that in February 2008, Freeport-McMoRan paid $700,000 for a mineral deposit in Bali. During March, it spent $63,000 in preparing the deposit for exploitation. It was estimated that 930,000 total cubic yards could be extracted economically. During 2008, 62,000 cubic yards were extracted. During January 2009, the company spent another $7,000 for additional developmental work that increased the estimated productive capacity of the mineral deposit. Required: 1. Compute the acquisition cost of the deposit in 2008. 2. Compute depletion for 2008. 3. Compute the net book value of the deposit after payment of the January 2009 developmental costs. Round depletion rate to 2 decimal places. 1. February 2008: March 2008: Purchase of Mineral Deposit Preparation Costs Total Acquisition Cost in 2008 $ 700,000 63,000 $ 763,000 2. Depletion Rate Depletion for 2008 $ 0.82 per cubic yard. $ 50,840 3. Total acquisition cost in 2008 Less: 2008 depletion January 2009: Developmental costs Net Book Value January 2009 $ 763,000 ( 50,840 ) 7,000 $ 719,160