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13 October, 00:39

The following information relates to the assets of Westfield Semiconductors as of December 31, 2019. Westfield uses the straight-line method for depreciation and amortization. Asset Acquisition Cost Expected Life Residual Value Time Used Land $104,300 Infinite $100,000 10 years Building 430,000 25 years 30,000 10 years Machine 285,000 5 years 10,000 2 years Patent 80,000 10 years 0 3 years Truck 21,000 100,000 miles 3,000 44,000 miles Required: Use the information above to prepare the property, plant, and equipment and intangible assets portions of a classified balance sheet for Westfield.

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  1. 13 October, 03:22
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    See the explanation below.

    Explanation:

    Given the following:

    Asset Acquisition-Cost Expected-Life Residual-Value Time-Used

    Land $104,300 Infinite $100,000 10 years

    Building 430,000 25 years 30,000 10 years

    Machine 285,000 5 years 10,000 2 years

    Patent 80,000 10 years 0 3 years

    Truck 21,000 100,000 miles 3,000 44,000 miles

    Therefore, we have:

    Building annual depreciation = ($430,000 - $30,000) / 25 = $16,000

    Building net book value (NBV) = $430,000 - (16,000 * 10) = $270,000

    Machine annual depreciation = ($285,000 - 10,000) / 10 = $27,500

    Machine NBV = $285,000 - ($27,500 * 2) = $230,000

    Patent annual amortization = $80,000 / 10 = $8,000

    Patent net written down value = $80,000 - ($8,000 * 3) = $56,000

    Truck accumulated depreciation = ($21,000 - 3,000) * (44,000 / 100,000) = $7,920

    Truck NBV = $21,000 - $7,920 = 13,080

    Westfield Semiconductors Balance Sheet (Partial) as of December 31, 2019.

    Details $

    Property, plant, and equipment:

    Land (Cost) 104,300

    Building (NBV) 270,000

    Machine (NBV) 230,000

    Truck (NBV) 13,080

    Total PPM 617,380

    Intangible assets:

    Patent (NRV) 56,000

    Total tangible and intangible assets 673,380
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