Just need that one answer: Depreciation Expense and how you got it, thanks!

CP8-2 (Static) Finding Financial Information L08-1, 3-2, 8-6 Refer to the financial statements of Express, Inc. given in Appendix Cand answer the following questions. (Hint Use the notes to the financial statements for many of these questions.) Required: 1. What method of depreciation does the company use? 2 What is the amount of accumulated depreciation at the end of the most recent reporting year? (Enter your answer in dollars.) 3a. For depreciation purposes, what is the estimated useful life of furniture, fixtures, and equipment? 3b. What is the estimated useful life of software. Including software developed for Internal use? 4. What was the original cost of leasehold improvements owned by the company at the end of the most recent reporting year? (Enter your answer in dollars.) 5. What amount of depreciation expense was reported as expense for the most recent reporting year? (Enter your answer in dollars. Round your answer to 2 decimal places.) 6. What is the company's fixed asset turnover ratio for the most recent year? (Round your answer to 2 decimal places.) Answer is complete but not entirely correct. 1. 2. 3a. 7 years What method of depreciation does the company use? Accumulated depreciation Estimated useful life of furniture, fixtures, and equipment Estimated useful life of software Original cost Depreciation expense 3b. 4. 7 years Straight-line method $ 842,434 5 to 3 to $ 437,323 $ 84,300,000.00 X 4.99 5. 6. Fixed asset turnover ratio CONSOLIDATED BALANCE SHEETS (Amounts in Thousands, Except Per Share Amounts) February 3, 2018 January 28, 2017 ASSETS CURRENT ASSETS Cash and cash equivalents Receivables, net Inventories Prepaid minimum rent Other 236,222 12,084 207,373 15,787 241.424 31.626 266,271 30.779 19,780 565,136 17.923 514,133 Total current assets PROPERTY AND EQUIPMENT Less: accumulated depreciation Property and equipment, nel 1,047.447 (642,434) 1.029,176 (577,890) 451.286 405,013 TRADENAME/DOMAIN NAMES/TRADEMARKS DEFERRED TAX ASSETS OTHER ASSETS Total assets 197,618 7,025 12,815 1,187,607 197,618 7.926 14.226 1,185,189 $ s $ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable Deferred revenue Accrued expenses Total current liabilities 145,589 28,920 116,355 172.668 29.428 80,301 282,397 290,864 137,618 146,328 DEFERRED LEASE CREDITS OTHER LONG-TERM LIABILITIES Total liabilities 105,125 533,607 120,777 S49,502 COMMITMENTS AND CONTINGENCIES (Note 13) STOCKHOLDERS' EQUITY: EXPRESS, INC. CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Amounts in Thousands, Except Per Share Amounts) 2017 2016 2015 s 2.138,030 2,192,547 S 2,350.129 NET SALES COST OF GOODS SOLD, BUYING AND OCCUPANCY COSTS Gross profit 1.522.297 1.529,343 1.554.852 615,233 063.204 795.277 OPERATING EXPENSES: 562.0188 559,541 587,747 Selling, general, and administrative expenses Restructuring costs 22.869 Other operating expense, net 536 62 292 Total operating expenses 585,493 559,603 588,039 OPERATING INCOME 29,740 103,601 207,238 2.242 13,468 15.882 (537) (484) 672 INTEREST EXPENSE, NET OTHER (INCOME) EXPENSE, NET INCOME BEFORE INCOME TAXES INCOME TAX EXPENSE 28,035 90,617 191,684 8.669 33,200 74,171 NET INCOME 19,366 57,417 S 116,513 OTHER COMPREHENSIVE INCOME: Foreign currency translation gain (loss) $ (402) $ 862 S (1.608) Amount reclassified to earnings 4.205 COMPREHENSIVE INCOME S 23.169 S 58,279 S 114.905 ONSOLIDATED STATEMENTS OF CASH FLOWS Amounts in Thousands) 2017 2016 2015 S 19,366 S 57,417 S 116,513 82.144 74.904 142 1.561 90,221 2.891 9,850 10,672 S.108 2.657 11.354 14.008 12.858 (347) 18,438 5,314 (912) (13.183) 1500) 20.065 (11,280) (10.700) (12,730) 12.812) 3.279 6,371 1.097 ASH FLOWS FROM OPERATING ACTIVITIES: Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization Loss on disposal of property and equipment Impairment charge Loss on deconsolidation of Canada Amortization of lease financing obligation discount Excess tax benefit from share-based compensation Share-based compensation Non-cash loss on extinguishment of debt Deferred taxes Landlord allowance amortization Other non-cash adjustments Payment of original issue discount Changes in operating assets and liabilities: Receivables, not Inventories Accounts payable, deferred revenue and accrued expenses Other assets and liabilities Net cash provided by operating activities ASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures Decrease in cash and cash equivalents resulting from deconsolidation of Canada Purchase of intangible assets Investment in equity interests Net cash used in investing activities ASH FLOWS FROM FINANCING ACTIVITIES: Repayment of long-term debe Costs incurred in connection with debt arrangements Payments on lease financing obligations Repayments of financing arrangements Excess tax benefit from share-based compensation Proceeds from exercise of stock options Repurchase of common stock under share repurchase programs (see Note 9) Repurchase of common stock for tax withholding obligations Net cash used in financing activities (28,954) 112,862) 24.691 14.144 (15.857) 3.442 (14.625 ) 17,705 32.628 229.603 118,567 186,708 (98,712) (115,343) 157.435 ) (9,232) (21) (95) (10,133) (108.866) (66,667) (115.378) (198,038 ) (1,006) (1,552) (1.710) (2,040 ) (1.595) (3.274) 347 2,735 (51,538) (17.264) (1.599) 1.276 (68,574 (14.450) 14.599 ) (58.271) (22.613) (271.997 (10,133) (108.866) (115,378) (198,038) (1,006) (1.552) Investment in equity interests Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES: Repayment of long-term det Costs incurred in connection with debt arrangements Payments on lease financing obligations Repayments of financing arrangements Excess tax benefit from share-based compensation Proceeds from exercise of stock options Repurchase of common stock under share repurchase programs (see Note 9 Repurchase of common stock for tax withholding obligations Net cash used in financing activities (1.710) (2,040) (1.595) (3.274) 347 2.735 (17,264) (1.599) (22,613 ) (51,538) 14.599) 1.276 (68,574 ) 14.450) (58.271) (271.997) EFFECT OF EXCHANGE RATE ON CASH 1438) 899 (1.484) 20.470 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, Beginning of period CASH AND CASH EQUIVALENTS, End of period 28,849 207.873 (159,256) 346.159 186.903 s 236,222 $ 207,373 S 186,903 S $ S 8,787 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid for interest Cash paid to taxing authorities See notes to consolidated financial statements. S 6,142 S 40.413 S 71.686 C-10 APPENDIX C Property and Equipment, Net Property and equipment are stated at cost. Depreciation of property and equipment is computed on a straight-line basis, using the following useful lives: Category Depreciable Life Software, including software developed for internal use 3 - 7 years Store related assets and other property and equipment 3 - 10 years Furniture, fixtures and equipment 5-7 years Leasehold improvements Shorter of lease term or useful life of the asset, typically no longer than 15 years Building improvements 6 - 30 years When a decision is made to dispose of property and equipment prior to the end of its previously estimated useful life, depreciation estimates are revised to reflect the use of the asset over the shortened estimated useful life. The cost of assets sold or retired and the related accumulated depreciation are removed from the accounts with any resulting gain or loss included in other operating expense (income), net, in the Consolidated Statements of Income and Comprehensive Income. Maintenance and repairs are charged to expense as incurred. Major renewals and betterments that extend useful lives are capitalized. Property and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. The reviews are conducted at the store level, the lowest identifiable level of cash flow. The impairment test requires the Company to estimate the fair value of the assets and compare this to their carrying value. If the fair value of the assets are less than the carrying value, then an impairment charge is recognized and the non-financial assets are recorded at fair value. The Company estimates the fair value using a discounted cash flow model. Factors used in the evaluation include, but are not limited to, management's plans for future operations, recent operating results, and projected cash flows. In 2017, as a result of decreased performance in certain stores, the Company recognized impairment charges of $4.4 million related to 12 stores. In addition, during 2017, the Company recognized $5.5 million related to its 17 Canadian stores, all of which were fully impaired and are now closed. In 2016, the Company recognized impairment charges of $5.1 million related to 11 stores. In 2015, the Company recognized impairment charges of $1.8 million related to 4 stores. With the exception of the Canadian impairment, impairment charges are recorded in cost of goods sold, buying, and occupancy costs in the Consolidated Statements of Income and Comprehensive Income. The Canadian impairment was recorded in restructuring costs in the Consolidated Statements of Income and Comprehensive Income. See Note 14 for further discussion of the exit of the Canadian operations, Intangible Assets The Company has intangible assets, which consist primarily of the Express and related tradenames and its Internet domain names. Intangible assets with indefinite lives are reviewed for impairment annually in the fourth quarter and may be reviewed more frequently if indicators of impairment are present. The impairment review is performed by assessing quantitative and/or qualitative factors to determine whether it is more likely than not that the fair value of the asset is less than its carrying amount. The consideration of indefinite lived intangible assets for impairment requires judgments surrounding future operating performance, economic conditions, and business plans, among other factors. The Company did not incur any impairment charges on indefinite lived intangible assets in 2017, 2016, or 2015, Investment in Equity Interests Selling, General, and Administrative Expenses Selling, general, and administrative expenses include all operating costs not included in cost of goods sold, buying and occupancy costs, with the exception of proceeds received from insurance claims and gain/loss on disposal of assets, which are included in other operating expense, net. These costs include payroll and other expenses related to operations at our corporate home office, store expenses other than occupancy, and marketing expenses. Other Operating Expense, Net Other operating income, net primarily consists of gains/losses on disposal of assets and excess proceeds from the settlement of insurance claims. Other (Income) Expense, Net Other (income) expense, net primarily consists of foreign currency transaction gains/losses. 3. Property and Equipment, Net Property and equipment, net, consisted of February 3, 2018 January 28, 2017 (in thousands) Building improvements S 86,487 86,487 Furniture, fixtures and equipment, and software 503,276 487,381 Leasehold improvements 437,323 440,403 Construction in process 19,550 14,094 Other 811 811 Total 1.047,447 1,029,176 Less: accumulated depreciation (642,434) (577,890) Property and equipment, net S 405,013 S 451,286 Depreciation expense totaled $89.8 million, $81.5 million, and $74,4 million in 2017, 2016, and 2015, respectively, excluding impairment charges discussed in Note 2