1. a) How much cash was received from the sale (disposal) of property, plant, and equipment during 2013?
b) Assume the cost of the PPE sold during 2013 was $950M and the accumulated depreciation on PPE sold amounted to $350M. What is the gain or loss on the sale?
2. Assume that Wal-Mart purchased equipment at the beginning of fiscal year 2009 for $480,000 cash. The equipment had an estimated useful life of 8 years and a residual value of $30,000.
a. What would depreciation expense be for year 3 under the straight-line method?
b. What would depreciation expense be for year 3 under the double-declining balance method?
c. What is the first year in which depreciation expense under the straight-line method is higher than under the declining balance method?
d. Assume Wal-Mart uses the straight-line depreciation method for its equipment. Also assume that at fiscal year-end 2013, Wal-Mart sold the equipment purchased at the beginning of fiscal year 2009 for $200,000 cash. Prepare the journal entry to record the sale of the equipment at year-end 2013.
3. a) What was the total current portion of Wal-Mart’s long-term debt at January 31, 2013?
b) What would have been the effect on working capital on January 31, 2013 if the current portion of long-term debt had not been properly reclassified? State the direction and dollar amount.
4. Refer to the Note 6 (with respect to the total long-term debt only). Wal-Mart is scheduled to pay debt maturities each fiscal year-end as indicated in the notes. At January 31, 2013, what was the present value of Wal-Mart’s fourth debt payment (due January 31, 2017)? (assume an 8% interest rate).