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Christy Company Operates in The Entertainment

Christy Company operates in the entertainment industry and purchased Matt's Movies in June 2013 for $2.7 million in goodwill. Since then, Christy has undertaken business acquisitions and diversifications. Selected financial data from Christy's recent annual report shows property, plant, and equipment balances increased from the prior year along with accumulated depreciation. Total revenue declined while income from operations increased from the prior year after adjustments for depreciation, amortization, and other items.

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78 views6 pages

Christy Company Operates in The Entertainment

Christy Company operates in the entertainment industry and purchased Matt's Movies in June 2013 for $2.7 million in goodwill. Since then, Christy has undertaken business acquisitions and diversifications. Selected financial data from Christy's recent annual report shows property, plant, and equipment balances increased from the prior year along with accumulated depreciation. Total revenue declined while income from operations increased from the prior year after adjustments for depreciation, amortization, and other items.

Uploaded by

Doreen
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Christy Company operates in the entertainment

Christy Company operates in the entertainment

Question

Christy Company operates in the entertainment industry. In June 2013, Christy purchased
Matt’s Movies
w
GET THE ANSWER>> https://solutionlly.com/downloads/christy-company-operates-in-the-
entertainment
Christy Company operates in the entertainment

Question

Christy Company operates in the entertainment industry. In June 2013, Christy purchased
Matt’s Movies
which produces and distributes various video products. The purchase resulted in $2.7 million in
goodwill. Since then, Christy has
undertaken a number of business acquisitions and diversifications as the
company expands. Selected date from a
recent annual report are as follows: ((dollars in thousands)

Property, Plant & Equipment and Intangibles Balance Sheet

Current Year

Prior Year

Film cost (net of amortization)

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$1,272

$ 991

Artists’ Contracts and other Entertainment Assets

761

645

Property, Plant & Equipment (net)

2,733

2,559

Excess of Cost over Fair Value of Assets Acquired

3,076

2/6
3,355

Accumulated Depreciation on Property, Plant & Equipment

1,178

1,023

Income Statement

Total Revenue

9,714

10,644

Statement of Cash Flows

3/6
Income from Operations

880

445

Adjustments

Depreciation

289

265

Amortization

208

4/6
190

Other Adjustments

-1,618

-256

Net Cash provided by Operations

-241

644

Required

1. Compute the
cost of the property, plant and equipment at the end of the current year. Explain your answer.

2. What was the


approximate age of the property, plant and equipment at the end of the current
year?
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3. Compute the
fixed asset turnover ratio for the current year. Explain your results.

4. What is the
“excess cost over fair value of assets acquired”?

5. On the
consolidated statement of cash flows, why are the depreciation and amortization
amounts added to income from continuing operations?

Christy Company operates in the entertainment

Attachments
Christy_Company(1)_(1).docx (14.74 KB)

Preview: property, xxxxx and xxxxxxxxx at the xxx of the xxxxxxx year?From xxx xxxxxxxx year,
xxx accumulated depreciation xxx at $1,023,000 xxx the xxxxxxxxxxxx xx the xxx in the xxxx
year was xxxxxxxx Assuming, x xxxxxxxxxxxxx method xx depreciation was xxxxx approximate
age xx the xxx xx of xxxx year would xx $1,023,000/$265,000 = x years xxx xxx current xxxxx
then approximate xxx = 4 x 1 x x years xxxxxxxxx any new xxxxxxxx PPE)Compute the xxxxx
asset xxxxxxxx xxxxx for xxx current year xxxxxxx your results xxxxx Asset xxxxxxxx x Net
xxxxxx Average PPEAverage xxx = (2,733,000 x 2,599,000)/ x x

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entertainment

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