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

Requirements

1. How much was Savanaugh’s cost of plant assets at March 31, 2018? How much was the book value of plant assets? Show computations.

2. The financial statements provide three pieces of evidence that Savanaugh 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:

March 31, Balance Sheet (dollars in millions) 2018 2017 Assets Total current assets .. Property, plant, and equipment.. Less: Accumulated depreciation $7,986 $6,906 4,833 4,196 1,723 2,129 Goodwill. . 552 512 Year Ended March 31, Statement of Cash Flows (dollars in millions) 2018 2017 Operating activities: Net income .. $1,149 $989 Noncash items affecting net income: Depreciation . 473 460 Gain on sale of property, plant and equipment.. (142) Investing activities: Additions to property, plant, and equipment (712) (616) Sale of property, plant and equipment... 150 ........