Question

This case includes data from The Shaw Group, Inc. annual report for the year ended August 31, 2010.


Assets acquired under capital leases, net of accumulated depreciation, were $ 1.6 million and $ 2.0 million at August 31, 2010, and 2009, respectively. If the assets acquired under capital leases transfer title at the end of the lease term or contain a bargain purchase option, the assets are amortized over their estimated useful lives; otherwise, the assets are amortized over the respective lease term. Depreciation expense of $ 59.8 million, $ 52.3 million, and $ 43.7 million for the fiscal years ended August 31, 2010, 2009, and 2008, respectively, is included in cost of revenues and general and administrative expenses in the accompanying consolidated statements of operations.
At August 31, 2010, construction in progress consisted primarily of deposits on heavy equipment to be used on some of our power projects. At August 31, 2009, construction in progress consisted primarily of cost related to the construction of our module fabrication and assembly facility in Lake Charles, Louisiana.
In fiscal year 2009, we recorded an asset impairment charge of $ 5.5 million for a consolidated joint venture. The impairment charge reduced the property, plant, and equipment to its salvage value.

Required
a. For August 31, 2010:
1. What was the gross amount for property and equipment?
2. What was the net amount for property and equipment?
3. What was the gross amount for assets acquired under capital leases?
4. What was the net amount for assets acquired under capital leases?
5. How material are assets acquired under capital leases in relation to total property and equipment?
b. How material are capital lease obligations in relation to total debt and revolving lines of credit at August 31, 2010?
c. Operating leases:
1. What was the total future minimum lease payments as of August 31, 2010?
2. Using two- thirds of future minimum lease payments representing principal, what would be the estimate for principal at August 31, 2010?
3. How material are operating leases in relation to capitalleases?


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  • CreatedMay 28, 2014
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