Hasbro Inc designs manufactures and markets high quality toys games
Hasbro Inc. designs, manufactures, and markets high- quality toys, games, and infant products. The company’s revenues exceed $ 4.0 billion. In the toy business, it is very difficult to determine the life expectancy of a product. Products that children love one year may sit on the shelf the following year. As a result, companies in the toy business often sell productive assets that are no longer needed. Assume that on December 31, 2014, the end of the company’s fiscal year, Hasbro’s records showed the following data about a machine that was no longer needed to make a toy that was popular last year:
On July 1, 2015, the machine was sold for $ 76,000 cash.
1. How old was the machine on January 1, 2015? Show computations.
2. Indicate the effect (i.e., the amount and direction—increase or decrease) of the sale of the machine on July 1, 2015, on
a. Total assets.
b. Net earnings.
c. Cash flows (for each section of the statement: operating, investing, and financing activities).
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