Chapter 9, Problem 9.1CTFSC

1.

To determine

Annual Report: It is a comprehensive financial report that shows all the business activities that takes place throughout the previous financial year. Its purpose is to provide the complete financial information of a company’s financial activities to its users in order to help them analyze and take well informed decisions.

To name: the depreciation method used by S Corporation for reporting in financial statements and probably for income tax purposes.

2.

To determine

To state: the amount of depreciation and amortization expense for the year ending September 29, 2013.

3.

To determine

To state: the amount of S Corporation’s additions to property, plant, and equipment during the year ending 2013 and amount of sale proceeds from property, plant, and equipment, if any.

4.

To determine

To state: the amount of accumulated depreciation and the net book value of property, plant, and equipment at September 29, 2013.

5.

To determine

Asset turnover is a ratio that measures the productive capacity of the assets to generate the sales revenue for the company. Thus, it shows the relationship between the net sales and the average total assets. The following is the formula to calculate the ratio:

$\text{Asset turnover }=\frac{\text{Net}\text{Sales}}{\text{Average total assets}}$

To compare: the asset turnover ratio of S Corporation with G Incorporation.