9th Edition

ISBN: 9781259722660

Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher: McGraw-Hill Education

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Chapter 11, Problem 11.14BYP

Real World Case 11–14

Disposition and depreciation; Chapters 10 and 11; D.R. Horton

• LO11–1

D.R. Horton, Inc., is the largest homebuilding company by volume in the United States. D.R. Horton reported the following in a disclosure note accompanying its 2015 financial statements ($ in millions):

Real World Financials

	2015	2014
Property and equipment	$ 313.8	$ 334.8
Less: Accumulated depreciation	(166.9)	(141.1)
Property, plant, and equipment – Net	$ 146.9	$ 193.7

Also, the company disclosed that the total cost of property and equipment included $26.7 and $66.9 (dollars in millions) in land at the end of 2015 and 2014, respectively. In addition, the statement of cash flows for the year ended December 31, 2015, reported the following as cash flows from investing activities:

	($ in millions)
Purchases of property and equipment	$(56.1)
Proceeds from the sale of property and equipment	56.0

The statement of cash flows also reported 2015 depreciation and amortization of $54.1 million (depreciation of $50.3 and amortization of $3.8).

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Chapter 11, Problem 11.13BYP

Chapter 11, Problem 11.15BYP

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Chapter 11 Solutions

Intermediate Accounting

Ch. 11 - Prob. 11.1Q Ch. 11 - Depreciation is a process of cost allocation, not...Ch. 11 - Identify and define the three characteristics of...Ch. 11 - Discuss the factors that influence the estimation...Ch. 11 - What is meant by depreciable base? How is it...Ch. 11 - Prob. 11.6Q Ch. 11 - Prob. 11.7Q Ch. 11 - Why are time-based depreciation methods used more...Ch. 11 - Prob. 11.9Q Ch. 11 - Prob. 11.10Q

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Solution Summary: The author explains that depreciation refers to the reduction in the monetary value of fixed tangible assets over its useful life due to its wear and tear or, obsolescence.

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