In chapter 5, we talked about inventory. Refer to "Note 6. Inventory on the (Disclosures] worksheet. In this note, Tesla explains that it write-downs inventory for any excess or obsolete inventories. This means that it debits a loss or Expense account and credits an Inventory account Tesla Corporation Fiscal 2020 Fiscal 2019 (ended Dec 31, 2020) lended Dec 31, 2019) 24 What amount (in Smillions) of Inventory did Tesla write-down? 25. What percentage was this of Tesla's total Inventory? In chapter 8, we talked about long-term assets. Refer to "Note 8 - Property, Plant and Equipment Net" on the Disclosures) worksheet. Remember that the value reported on the Balance Sheet is net of accumulated depreciation--the remaining unused value of these assets. Fiscal 2020 Fiscal 2019 fended Dec 31, 2020) fended Dec.21. 2019) 26. Percentage of Property. Plant and Equipment assets used up" (already depreciated) 27. In chapter 9, we talked about accrued liabilities. Refer to Refer to "Note 9. Accured abilities and Other on the Disclosures) worksheet. Note that these amounts (almost 4 Balion) were accrued in the credit part of a journal entry. What category of account (asset, liability, revenue, expense, etc.) would have appeared in the debit part of these accrual journal entries? Following are excerpts from Tesla's 2020 annual 10-K document. Expanded excerpts from the 10-K were also published with the assignment in Canvas (see the notes at the bottom for explanation of some terms used). 1 2 3 5 6 7 8 9 Note 2 - Summary of Significant Accounting Policies Cash and Cash Equivalents Al highly liquid investments with an original maturity of three months or less at the date of purchase are considered cash equivalents. Our cash equivalents are primarily comprised of money market funds. Restricted Cash We maintain certain cash balances restricted as to withdrawal or use. Our restricted cash is comprised primarily of cash as collateral for our sales to lease partners with a resale value guarantee, letters of credit, real estate leases, Insurance policies, credit card borrowing facilities and certain operating leases. In addition, restricted cash includes cash received from certain fund investors that have not been released for use by us and cash held to service certain payments under vanous secured debt facilities. We record restricted cash as other assets in the consolidated balance sheets and determine current or noncurrent classification based on the expected duration of the restriction. Our total cash and cash equivalents and restricted cash, as presented in the consolidated statements of cash flows, was as follows (in Millions): December 31. December 31 December 31 2020 2019 2018 Cash and cash equivalents $19,384 $6,268 $3,686 Restricted cash included in prepaid expenses and other current 238 246 193 assets 10 Restricted cash included in other non-current assets 279 269 398 14 Total as presented in the consolidated statements of cash flows $19,901 $6,783 $4,277 Note 6 - Inventory 13 Our inventory consisted of the following in millone) December 31 December 31, 2020 2019 15 Raw materials $1,508 $1,428 16 Work in process 493 362 17 Finished goods (1) 1.666 1.356 18 Service parts 406 $4,101 $3,552 (1) Finished goods inventory includes vehicles in transit to fulfill customer orders, new vehicles available for sale, used vehicles, energy storago products and Solar Roof products available for sale 20 For solar energy systems, we commence transferring component parts from inventory to construction in progress, a component of solar energy systems, once a lease or PPA contract with a customer has been executed and installation has been initiated. Additional costs incurred on the loosed solar energy systems, including labor and overhead, are recorded within solar energy systems under construction Wo write down inventory for any excess or obuoloto inventories or when we believe that the net realizable value of Inventories is less than the carrying value. During the years ended December 31, 2020, 2019 and 2018, we recorded write-downs of $145 million, 5136 million and $78 million, respectively, in cost of revenues Note 8 - Property, Plant, and Equipment, net 12 14 434 19 Total 21 22 23 Following are excerpts from Tesla's 2020 annual 10-K document. Expanded excerpts from the 10-K were also published with the assignment in Canvas (see the notes at the bottom for explanation of some terms used). 22 23 25 32 Note 8 - Property, Plant, and Equipment, net 24 Our inventory consisted of the following (in millions): December 31, December 31, 2020 2019 26 Machinery, equipment, vehicles and office fumiture $8,493 $7,167 27 Tooling 1,811 1,493 28 Leasehold improvements 1,421 1,087 29 Land and buildings 3,662 3,024 30 Computer equipment, hardware and software 856 595 31 Construction in progress 1,621 764 17,864 14,130 33 Less: Accumulated depreciations (5.117) (3.734) 34 Total $12,747 $10,396 Construction in progress is primarily comprised of construction of Gigafactory Berlin and Gigafactory Texas, expansion of Gigafactory Shanghal and equipment and tooling related to the manufacturing of our products. We are currently constructing Gigafactory Berlin under conditional permits. Completed assets are transferred to their respective asset classes, and depreciation begins when an asset is ready for its intended use. Interest on outstanding debt is capitalized during periods of significant capital asset construction and amortized over the useful lives of the related assets. During the years ended December 31, 2020 and 2019, we capitalized $48 million and $31 million, respectively, of interest Depreciation expense during the years ended December 31, 2020, 2019 and 2018 was $1.57 billion, $1.37 billion and $1.11 billion, respectively. Gross property, plant and equipment under finance leases as of December 31, 2020 and 2019 was $2.28 billion and $2.08 billion, respectively, with accumulated depreciation of $816 million and $483 million, respectively 35 36 37 Note 9 - Accrued Liabilities and Other As of December 31, 2020 and 2019, accrued liabilities and other current liabilities consisted of the following in 38 millions): December 31, December 31, 39 2020 2019 40 Accrued purchases (1) $901 $638 41 Taxes payable (2) 777 611 42 Payroll and related costs 654 466 43 Accrued warranty reservo, current portion 479 344 44 Sales retum reserve, current portion 272 45 Operating loose liabilities, current portion 286 228 46 Accrued interest 77 86 47 Resale value guarantees, current portion 23 317 48 Other current liabilities 241 260 49 Total $3,855 $3,222 417 J L M CU W men C Following are excerpts from Tesla's 2020 annual 10-K document. Expanded excerpts from the 10-K were also D # 1 1 published with the assignment in Canvas (see the notes at the bottom for explanation of some formated) $1.11 billion, respectively. Gross property, plant and equipment under finance lases as of December 31, 2020 and 2019 was $2.28 billion and $2.08 bilion, respectively, with accumulated depreciation of $816 million and 5483 million, respectively 38 32 Note 9-Accrued Liabilities and Other As of December 31, 2020 and 2019, accrued liabilities and other current liabilities consisted of the following in 38 millons) December 31. December 31 319 2020 2019 40 Accrued purchases (1) $901 $636 41. Taxes payable (2) 777 42 Payroll and related costs 654 466 43 Accrued warranty reserve, current portion 479 344 4 Sales retum reserve, current portion 417 272 45 Operating lase labitis, current portion 286 228 40 Acerved interest 77 BO 47 Rosale value guarantees, current portion 23 317 48 Other current liabilities 241 200 40 Total $3,855 $3.222 (1) Accrued purchases primarily reflects receipts of goods and services that we had not been invloed yet. As we are involond for those goods and services, this balance will reduce and accounts payable will increase 30 (2) Taxes payable includes value added tax, sales tax, property tax, une tax and income tax payables 51 32 Terminology used above: "Cash Equivalents are very short-term (90 days) investments in highly marketable investments (ike Bils or CDs) that can quickly be converted to actual cat companies are allowed to combine them with cash for financial reporting "Restricted Cash" la cash that is set aside for a specific purpose, so it is not available to pay general obligation must be reported separately from "Cash & cash equivalents on the Balance Sheet A "Leasehold Improvement" in the value of improvements (wgndicant repain, upgrades or addition to an asset that in loosed rather than purchased. The value is recorded as an asset and deprecated over the remaining term of the lease "Construction in Progress" is the value of depreciable assets that are under construction (iko a new factory) Thay are listed separately because they are not depreciated until they begin being used in the operation "Accumulated deficit" (appears on the 2020 Balance Sheet) is the name used when a company's retained eamings" is negative. Remember that a Net Loss instead of Net Income) reduces Retained Eamings, as does the payment of a cash dividend. There are other events discussed in more advanced accounting courses the stock buybacks) that can also reduce Retained Eamings In chapter 5, we talked about inventory. Refer to "Note 6. Inventory on the (Disclosures] worksheet. In this note, Tesla explains that it write-downs inventory for any excess or obsolete inventories. This means that it debits a loss or Expense account and credits an Inventory account Tesla Corporation Fiscal 2020 Fiscal 2019 (ended Dec 31, 2020) lended Dec 31, 2019) 24 What amount (in Smillions) of Inventory did Tesla write-down? 25. What percentage was this of Tesla's total Inventory? In chapter 8, we talked about long-term assets. Refer to "Note 8 - Property, Plant and Equipment Net" on the Disclosures) worksheet. Remember that the value reported on the Balance Sheet is net of accumulated depreciation--the remaining unused value of these assets. Fiscal 2020 Fiscal 2019 fended Dec 31, 2020) fended Dec.21. 2019) 26. Percentage of Property. Plant and Equipment assets used up" (already depreciated) 27. In chapter 9, we talked about accrued liabilities. Refer to Refer to "Note 9. Accured abilities and Other on the Disclosures) worksheet. Note that these amounts (almost 4 Balion) were accrued in the credit part of a journal entry. What category of account (asset, liability, revenue, expense, etc.) would have appeared in the debit part of these accrual journal entries? Following are excerpts from Tesla's 2020 annual 10-K document. Expanded excerpts from the 10-K were also published with the assignment in Canvas (see the notes at the bottom for explanation of some terms used). 1 2 3 5 6 7 8 9 Note 2 - Summary of Significant Accounting Policies Cash and Cash Equivalents Al highly liquid investments with an original maturity of three months or less at the date of purchase are considered cash equivalents. Our cash equivalents are primarily comprised of money market funds. Restricted Cash We maintain certain cash balances restricted as to withdrawal or use. Our restricted cash is comprised primarily of cash as collateral for our sales to lease partners with a resale value guarantee, letters of credit, real estate leases, Insurance policies, credit card borrowing facilities and certain operating leases. In addition, restricted cash includes cash received from certain fund investors that have not been released for use by us and cash held to service certain payments under vanous secured debt facilities. We record restricted cash as other assets in the consolidated balance sheets and determine current or noncurrent classification based on the expected duration of the restriction. Our total cash and cash equivalents and restricted cash, as presented in the consolidated statements of cash flows, was as follows (in Millions): December 31. December 31 December 31 2020 2019 2018 Cash and cash equivalents $19,384 $6,268 $3,686 Restricted cash included in prepaid expenses and other current 238 246 193 assets 10 Restricted cash included in other non-current assets 279 269 398 14 Total as presented in the consolidated statements of cash flows $19,901 $6,783 $4,277 Note 6 - Inventory 13 Our inventory consisted of the following in millone) December 31 December 31, 2020 2019 15 Raw materials $1,508 $1,428 16 Work in process 493 362 17 Finished goods (1) 1.666 1.356 18 Service parts 406 $4,101 $3,552 (1) Finished goods inventory includes vehicles in transit to fulfill customer orders, new vehicles available for sale, used vehicles, energy storago products and Solar Roof products available for sale 20 For solar energy systems, we commence transferring component parts from inventory to construction in progress, a component of solar energy systems, once a lease or PPA contract with a customer has been executed and installation has been initiated. Additional costs incurred on the loosed solar energy systems, including labor and overhead, are recorded within solar energy systems under construction Wo write down inventory for any excess or obuoloto inventories or when we believe that the net realizable value of Inventories is less than the carrying value. During the years ended December 31, 2020, 2019 and 2018, we recorded write-downs of $145 million, 5136 million and $78 million, respectively, in cost of revenues Note 8 - Property, Plant, and Equipment, net 12 14 434 19 Total 21 22 23 Following are excerpts from Tesla's 2020 annual 10-K document. Expanded excerpts from the 10-K were also published with the assignment in Canvas (see the notes at the bottom for explanation of some terms used). 22 23 25 32 Note 8 - Property, Plant, and Equipment, net 24 Our inventory consisted of the following (in millions): December 31, December 31, 2020 2019 26 Machinery, equipment, vehicles and office fumiture $8,493 $7,167 27 Tooling 1,811 1,493 28 Leasehold improvements 1,421 1,087 29 Land and buildings 3,662 3,024 30 Computer equipment, hardware and software 856 595 31 Construction in progress 1,621 764 17,864 14,130 33 Less: Accumulated depreciations (5.117) (3.734) 34 Total $12,747 $10,396 Construction in progress is primarily comprised of construction of Gigafactory Berlin and Gigafactory Texas, expansion of Gigafactory Shanghal and equipment and tooling related to the manufacturing of our products. We are currently constructing Gigafactory Berlin under conditional permits. Completed assets are transferred to their respective asset classes, and depreciation begins when an asset is ready for its intended use. Interest on outstanding debt is capitalized during periods of significant capital asset construction and amortized over the useful lives of the related assets. During the years ended December 31, 2020 and 2019, we capitalized $48 million and $31 million, respectively, of interest Depreciation expense during the years ended December 31, 2020, 2019 and 2018 was $1.57 billion, $1.37 billion and $1.11 billion, respectively. Gross property, plant and equipment under finance leases as of December 31, 2020 and 2019 was $2.28 billion and $2.08 billion, respectively, with accumulated depreciation of $816 million and $483 million, respectively 35 36 37 Note 9 - Accrued Liabilities and Other As of December 31, 2020 and 2019, accrued liabilities and other current liabilities consisted of the following in 38 millions): December 31, December 31, 39 2020 2019 40 Accrued purchases (1) $901 $638 41 Taxes payable (2) 777 611 42 Payroll and related costs 654 466 43 Accrued warranty reservo, current portion 479 344 44 Sales retum reserve, current portion 272 45 Operating loose liabilities, current portion 286 228 46 Accrued interest 77 86 47 Resale value guarantees, current portion 23 317 48 Other current liabilities 241 260 49 Total $3,855 $3,222 417 J L M CU W men C Following are excerpts from Tesla's 2020 annual 10-K document. Expanded excerpts from the 10-K were also D # 1 1 published with the assignment in Canvas (see the notes at the bottom for explanation of some formated) $1.11 billion, respectively. Gross property, plant and equipment under finance lases as of December 31, 2020 and 2019 was $2.28 billion and $2.08 bilion, respectively, with accumulated depreciation of $816 million and 5483 million, respectively 38 32 Note 9-Accrued Liabilities and Other As of December 31, 2020 and 2019, accrued liabilities and other current liabilities consisted of the following in 38 millons) December 31. December 31 319 2020 2019 40 Accrued purchases (1) $901 $636 41. Taxes payable (2) 777 42 Payroll and related costs 654 466 43 Accrued warranty reserve, current portion 479 344 4 Sales retum reserve, current portion 417 272 45 Operating lase labitis, current portion 286 228 40 Acerved interest 77 BO 47 Rosale value guarantees, current portion 23 317 48 Other current liabilities 241 200 40 Total $3,855 $3.222 (1) Accrued purchases primarily reflects receipts of goods and services that we had not been invloed yet. As we are involond for those goods and services, this balance will reduce and accounts payable will increase 30 (2) Taxes payable includes value added tax, sales tax, property tax, une tax and income tax payables 51 32 Terminology used above: "Cash Equivalents are very short-term (90 days) investments in highly marketable investments (ike Bils or CDs) that can quickly be converted to actual cat companies are allowed to combine them with cash for financial reporting "Restricted Cash" la cash that is set aside for a specific purpose, so it is not available to pay general obligation must be reported separately from "Cash & cash equivalents on the Balance Sheet A "Leasehold Improvement" in the value of improvements (wgndicant repain, upgrades or addition to an asset that in loosed rather than purchased. The value is recorded as an asset and deprecated over the remaining term of the lease "Construction in Progress" is the value of depreciable assets that are under construction (iko a new factory) Thay are listed separately because they are not depreciated until they begin being used in the operation "Accumulated deficit" (appears on the 2020 Balance Sheet) is the name used when a company's retained eamings" is negative. Remember that a Net Loss instead of Net Income) reduces Retained Eamings, as does the payment of a cash dividend. There are other events discussed in more advanced accounting courses the stock buybacks) that can also reduce Retained Eamings