The excerpts that follow are adapted from financial statements of a Canadian not-for profit organization.

Requirements
1. How much was the entity's cost of property, plant, and equipment at March 31, 2017? How much was the carrying amount of property, plant, and equipment? Show computations.
2. The financial statements give four pieces of evidence that the entity purchased property, plant, and equipment and sold long-term investments during 2017. What is the evidence?
3. Prepare T-accounts for Property, Plant and Equipment, Accumulated Depreciation, and Long-Term Investments. Then show all the activity in these accounts during 2017. Label each increase or decrease and give its dollar amount.
4. Why is depreciation added to net income on the statement of cash flows?

Transcribed Image Text:

(amounts in thousands) Balance Sheet Assets Total current assets Property, plant, and equipment Less accumulated depreciation Long-term investments March 31 2017 2016 $277,631 68,406 (26,909) 108,302 $261,015 61,225 (22,725) 147,165 For the Year Ended March 31 Consolidated Statement of Cash Flows Operating excess of revenues over expense Noncash items affecting net income: 2017 2016 $13,068 4,184 (7,781) 15,321 Depreciation 3,748 Cash flows from investing activities: Additions to property, plant, and equipment Reduction of (addition to) long-term investments (8,623) 38,863 (96,316)