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|
|Statement of Cash Flows|
|Income from Operations||880||445|
|Net Cash provided by Operations||-241||644|
- Compute the cost of the property, plant and equipment at the end of the current year. Explain your answer.
- What was the approximate age of the property, plant and equipment at the end of the current year?
- Compute the fixed asset turnover ratio for the current year. Explain your results.
- What is the “excess cost over fair value of assets acquired”?
- On the consolidated statement of cash flows, why are the depreciation and amortization amounts added to income from continuing operations?