Caribbean Sales, Inc., sells electronics and appliances. The excerpts that follow are adapted from Caribbean’s financial statements for 2018 and 2017:

Requirements

1. How much was Caribbean’s cost of plant assets at April 30, 2018? How much was the book value of plant assets? Show computations.

2. The financial statements provide three pieces of evidence that Caribbean purchased plant assets and goodwill during fiscal year 2018. What are they?

3. Prepare T-accounts for Property, Plant, and Equipment; Accumulated Depreciation; and Goodwill. Then fill in the T-accounts with information from the comparative balance sheets and cash flow statements. Label each increase or decrease and give its dollar amount.

4. Prepare the journal entry for the sale of property, plant, and equipment in 2018.

Transcribed Image Text:

April 30, Balance Sheet (dollars in millions) 2017 2018 Assets Total current assets .. Property, plant and equipment. Less: Accumulated depreciation $7,989 $6,909 4,834 4,193 2,128 1,730 Goodwill.. 554 519 Year Ended April 30, Statement of Cash Flows (dollars in millions) 2018 2017 Operating activities: Net income .. $1,143 $981 Noncash items affecting net income: Depreciation . 463 453 Gain on sale of property, plant and equipment . (134) Investing activities: Additions to property, plant and equipment (714) (617) Sale of property, plant and equipment . 142