Question

Dicks Sporting Goods included the following information in its year-end 2015 10-K Sales $7,270,965 PPE, gross 2,665,314 Land Construction in progress 124,400 Accumulated depreciation 1,317,429 PPE, net, at year-end 2014 1,203,382 Depreciation expense 193,594 a. Compute PPE turnover. Round answer to one decimal place. Answer 0 b. Compute the average useful life. Round answer to one decimal place. Answer 0 years c. Compute the percentage used up of the PPE. Round answer to one decimal place (ex: 0.2345

Answer 1

a. 6.6 times

b. 13.8 years

c. 56.7%

Step-by-step explanation:

Sales $7,270,965

PPE, gross 2,665,314

Land Construction in progress 124,400

Accumulated depreciation 1,317,429

PPE, net, at year-end 2014 1,203,382

Depreciation expense 193,594

a. Compute PPE turnover. Round answer to one decimal place.

Beginning PPE = $1,203,382

Ending PPE =Beginning PPE - Depreciation expense = $1,203,382 - $193,594 = $1,009,788

Average PPE = ($1,203,382 + $1,009,788) / 2 = $1,106,585

PPE turnover = Sales / Average PPE = $7,270,965 / $1,106,585 = 6.6 times.

b. Compute the average useful life. Round answer to one decimal place.

Average useful life = PPE, gross / Depreciation expense = $2,665,314 / $193,594 = 13.8 years

c. Compute the percentage used up of the PPE. Round answer to one decimal place

Accumulated depreciation to date = Accumulated depreciation + Depreciation expense = $1,317,429 + $193,594 = $1,511,023

PPE percentage used up = $1,511,023 / $2,665,314 = 0.567, or 56.7%