Exam 6: Inventory, Accounts Payable, and Long-Term Assets

The 2016 financial statements for Leggett & Platt, Inc. report the following information: a. By what percentage are the assets 'used up' at the year-end 2016? What implication does this ratio have for future cash flows at Leggett & Platt? b. Estimate the useful life on average for the Leggett & Platt depreciable assets.

Leggett and Platt uses the LIFO method of accounting for inventory. The company reported a LIFO reserve of $22.6 million at the beginning of the 2016 fiscal year and a LIFO reserve of $33.8 million at the end of the 2016 fiscal year. Cost of goods sold reported on the 2016 income statement was $2,850.7 million. What would the company have reported for cost of goods sold had they used FIFO to account for inventory costs?

Aiello, Inc. had the following inventory in fiscal 2016. Compute the company's cost of goods sold for fiscal 2016 assuming the company used a) FIFO and b) LIFO methods of accounting for inventory: Beginning Inventory, January 1, 2016: 130 units @ $15.00 Purchase 200 units @ $18.00 Purchase 50 units @ $13.50 Purchase 110 units @ $15.75 Ending Inventory, December 31, 2016: 120 units

The gain or loss on the sale of the asset is computed by: Gain / (Loss) on sale = Market value of asset - Net book value of asset

Other than raw materials and manufacturing overhead, what is the third component of inventories for manufacturing companies?

Aiello Industries recorded a restructuring charge of $37.8 million during fiscal 2017 related entirely to the closing of its operations based in Orlando, Florida. The company's financial statement footnotes indicated that expected employee separation payments amounted to $29.4 million and that fixed asset write-downs accounting for the remainder. Aiello had never before incurred restructuring charges. At the end of the year, the company's balance sheet included a restructuring accrual of $6,300,000. Calculate the cash flow effect of Nickolas's restructuring during fiscal 2017.

Acadia, Inc. recorded restructuring charges of $235,542 thousand during fiscal 2017 related entirely to anticipated employee separation payments. Acadia, Inc. had never before incurred restructuring charges. At the end of the year, the company's balance sheet included a restructuring accrual of $29,643 thousand. The cash flow effect of Acadia's restructuring during fiscal 2017 was:

One difference between straight-line and double-declining-balance depreciation methods is that:

When a firm uses an accelerated method of depreciation for tax reporting in order to minimize its tax burden, it will not really save any tax dollars in the end because depreciation method merely changes the timing of the depreciation expenses but not the total.

The January 28, 2017 (fiscal year 2016) financial statements of Caleres, Inc. reported the following information (in thousands). If Caleres had used the FIFO method of inventory costing, 2016 inventory would have been:

The Rialto Theatre purchased a new projector costing $123,000 on January 1, 2017. Because of changing technologies, the projector is estimated to last four years after which it will be obsolete and have a salvage value of $6,000 as a collectors' item. Compute the depreciation expense for 2017 using: a. The straight-line method b. Double-declining-balance method

The January 28, 2017 (fiscal year 2016) financial statements of Caleres, Inc. reported the following information (in thousands). If Caleres had used the FIFO method of inventory costing, 2016 COGS would have been:

The 2016 financial statements for BNSF Railway report the following information: a. Compute the common-size amount for property and equipment, net for 2016. Does this ratio seem high or low to you? Explain. b. Compute property, plant and equipment turnover for 2016. Interpret the ratio.

Which of the following estimates are not always required when calculating depreciation expense? Select all that apply.

Central Supply purchased a new printer for $72,000. The printer is expected to operate for ten (10) years, after which it will be sold for salvage value (estimated to be $7,200). How much is the first and second year's depreciation expense if the company uses the double-declining-balance method?

The January 28, 2017 (fiscal year 2016) financial statements of Caleres, Inc. reported the following information (in thousands): The 2016 average days inventory outstanding is:

The 2016 financial statements for BNSF Railway report the following information: The 2016 property, plant and equipment turnover is:

Plastix Inc. bought a molding machine for $555,000 on June 1, 2016. The company expected to use this machine to extrude plastic toys for the next eight (8) years, when the machine would be sold for $45,000. On June 1, 2018, their major customer, Wal-Mart, gave notification that they were terminating Plastix Inc. as a supplier. Plastix Inc.'s accountants estimate that the machine will generate $390,000 in future cash inflows from other customers and the fair value of the machine is $345,000. Plastix uses straight-line depreciation. a. Is this asset impaired on June 1, 2018? Show your calculation. b. If the equipment is impaired, what is the impairment loss on June 1, 2018?