Question

The following is a list of account titles and amounts (in millions) reported at December 27, 2015, by Hasbro, Inc., a leading manufacturer of games, toys, and interactive entertainment software for children and families: Accounts Receivable $ 1,235 Equipment $ 415 Accumulated Amortization 840 Goodwill 595 Accumulated Depreciation 360 Inventories 380 Allowance for Doubtful Accounts 15 Land 5 Buildings 180 Licensing Rights 1,860 Cash and Cash Equivalents 980 Prepaid Rent 290 Required: Prepare the asset section of a classified balance sheet for Hasbro, Inc. Using Hasbro’s 2015 Net Sales Revenue of $4,450 (million), its Net Fixed Assets of $240 (million) at December 28, 2014, and its Net Fixed Assets computed at December 27, 2015, calculate the fixed asset turnover ratio for 2015.

Answer 1

The assets session if the company may be presented as follows;

Hasbro Inc.

Assets section of the balance sheet

Assets Amount in $'millions Amount in $'millions

Current Assets

Cash and cash equivalent 980

Account receivables 1,235

Allowance for doubtful debt (15)

Inventories 380

Prepaid rent 290

Total current asset 2,870

Property, plant and equipment

Land 5

Building 180

Equipment 415

Accumulated depreciation (360)

Property, plant and equipment (net) 240

Other assets

Licensing rights 1860

Accumulated amortization (840)

Goodwill 595

Total other assets 1615

Total assets 4,725

Fixed assets turnover ratio for 2015 = 18.54

Step-by-step explanation:

The asset turnover is a financial measure that shows how much revenue management has been able to generate for each $1 invested in asset. In computing the asset turnover ratio, we use the average asset which is the result of the opening asset plus closing assets divided by 2.

The fixed asset amounts to the cost net the accumulated depreciation

The Fixed asset as at December 27 2015,

= $415 + $5 +180 - 360

= $240

Average asset turnover = (240 + 240)/2

= $240

Fixed assets turnover ratio for 2015 = $4,450/$240

= 18.54