Required information [The following information applies to the questions displayed below.] Fausett Electronics, Incorporated, headquartered in Richfield, Minnesota, is one of the leading consumer electronics retailers, operating more than 1,000 stores across the globe. The following was reported in a recent annual report: CONSOLIDATED BALANCE SHEETS ($ in millions) Current Year Prior Year ASSETS Property and Equipment Land and buildings $758 $715 Leasehold improvements 2,025 1,733 Fixtures and equipment 4,070 3,040 Property under capital and finance leases 126 54 6,979 5,542 Less accumulated depreciation 2,785 2,295 Net property and equipment 4,194 3,247 2. Assume that Fausett Electronics failed to record depreciation during the current year. Indicate the effect of the error (i.e., overstated or understated) on the following ratios: a. Earnings per share. b. Fixed asset turnover. c. Current ratio. d. Return on assets.
Required information [The following information applies to the questions displayed below.] Fausett Electronics, Incorporated, headquartered in Richfield, Minnesota, is one of the leading consumer electronics retailers, operating more than 1,000 stores across the globe. The following was reported in a recent annual report: CONSOLIDATED BALANCE SHEETS ($ in millions) Current Year Prior Year ASSETS Property and Equipment Land and buildings $758 $715 Leasehold improvements 2,025 1,733 Fixtures and equipment 4,070 3,040 Property under capital and finance leases 126 54 6,979 5,542 Less accumulated depreciation 2,785 2,295 Net property and equipment 4,194 3,247 2. Assume that Fausett Electronics failed to record depreciation during the current year. Indicate the effect of the error (i.e., overstated or understated) on the following ratios: a. Earnings per share. b. Fixed asset turnover. c. Current ratio. d. Return on assets.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Required information
[The following information applies to the questions displayed below.]
Fausett Electronics, Incorporated, headquartered in Richfield, Minnesota, is one of the leading consumer electronics
retailers, operating more than 1,000 stores across the globe. The following was reported in a recent annual report:
CONSOLIDATED BALANCE SHEETS
($ in millions)
Current Year Prior Year
ASSETS
Property and Equipment
Land and buildings
$758
$715
Leasehold improvements
2,025
1,733
Fixtures and equipment
4,070
3,040
Property under capital and finance leases
126
54
6,979
5,542
Less accumulated depreciation
2,785
2,295
Net property and equipment
4,194
3,247
2. Assume that Fausett Electronics failed to record depreciation during the current year. Indicate the effect of the error (i.e., overstated
or understated) on the following ratios:
a. Earnings per share.
b. Fixed asset turnover.
c. Current ratio.
d. Return on assets.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcefeeca5-6d8b-4220-ae38-86c40c7e4d1d%2Fa7d96de0-7136-4f0a-9e87-7b902b929c34%2Fdari0a_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
Fausett Electronics, Incorporated, headquartered in Richfield, Minnesota, is one of the leading consumer electronics
retailers, operating more than 1,000 stores across the globe. The following was reported in a recent annual report:
CONSOLIDATED BALANCE SHEETS
($ in millions)
Current Year Prior Year
ASSETS
Property and Equipment
Land and buildings
$758
$715
Leasehold improvements
2,025
1,733
Fixtures and equipment
4,070
3,040
Property under capital and finance leases
126
54
6,979
5,542
Less accumulated depreciation
2,785
2,295
Net property and equipment
4,194
3,247
2. Assume that Fausett Electronics failed to record depreciation during the current year. Indicate the effect of the error (i.e., overstated
or understated) on the following ratios:
a. Earnings per share.
b. Fixed asset turnover.
c. Current ratio.
d. Return on assets.
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