Period 4 Quiz-Fixed Asset Calculations

Christy Company operates in the entertainment industry.  In June 2013, Christy purchased Matt’s Movies which produces and distributes various video products.  The purchase resulted in \$2.7 million in goodwill.  Since then, Christy has undertaken a number of business acquisitions and diversifications as the company expands.  Selected date from a recent annual report are as follows: ((dollars in thousands)

 Property, Plant & Equipment and Intangibles  Balance Sheet Current Year Prior Year Film cost (net of amortization) \$1,272 \$  991 Artists’ Contracts and other Entertainment Assets 761 645 Property, Plant & Equipment (net) 2,733 2,559 Excess of Cost over Fair Value of Assets Acquired 3,076 3,355 Accumulated Depreciation on Property, Plant & Equipment 1,178 1,023 Income Statement Total Revenue 9,714 10,644 Statement of Cash Flows Income from Operations 880 445 Adjustments Depreciation 289 265 Amortization 208 190 Other Adjustments -1,618 -256 Net Cash provided by Operations -241 644

Required

1. Compute the cost of the property, plant and equipment at the end of the current year.  Explain your answer.
2. What was the approximate age of the property, plant and equipment at the end of the current year?
3. Compute the fixed asset turnover ratio for the current year. Explain your results.
4. What is the “excess cost over fair value of assets acquired”?
5. On the consolidated statement of cash flows, why are the depreciation and amortization amounts added to income from continuing operations?