Kosciusko Corporation is a manufacturing firm that has $3,600,000 of long-term assets that are used in operations. Following is the acquisition cost, accumulated depreciation, and depreciation expense for each asset through the end of 2009.
(a) Prepare the PP&E section of Kosciusko Corporation’s balance sheet at the end of 2009.
(b) Why has no depreciation expense been recorded on the land owned by Kosciusko?
(c) Assuming that no PP&E assets have been acquired by Kosciusko during the year, what is the average useful life of each category of assets other than land?
(d) Assume that Kosciusko had acquired $60,000 of office furniture and $5,000 of delivery trucks during 2009. What is the capital spending to depreciation ratio for each of these two categories of assets? Discuss your assessment of this ratio.
(e) Besides the information you developed in parts (a) through (d), what other information regarding Kosciusko’s PP&E assets is needed by decision makers who use the company’s financial statements?

  • CreatedMarch 27, 2015
  • Files Included
Post your question