Question:

BTN 10-1 Refer to the financial statements of Krispy Kreme in Appendix A to answer the following:?

by Guest11043  |  earlier

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1. What percent of the original cost of Krispy Kreme’s property, plant, and equipment remains to be depreciated

as of February 2, 2003, and February 3, 2002? Assume these assets have no salvage value.

2. Over what length(s) of time is Krispy Kreme amortizing its intangible assets?

3. What is the change in total property and equipment (before accumulated depreciation) for the year

ended February 2, 2003? What is the amount of cash provided (used) by investing activities for

property and equipment for the year ended February 2, 2003? What is one possible explanation

for the difference between these two amounts?

4. Compute its total asset turnover for the year ended February 2, 2003.

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  1. 1. What % of the original cost of Krispy Kreme’s PPE remains to be depreciated as of Feb 2, 2003, and Feb 3, 2002? Assume these assets have no salvage value

    2003: 77.83%

    2002: 68.57%

    (I have removed land and construction in progress from the calculations since they are not depreciated)

    2. Over what length(s) of time is Krispy Kreme amortizing its intangible assets?

    Goodwill and intangible assets have indefinite useful lives and are not amortized but are reviewed at least annually for impairment in accordance with SFAS No. 142.

    3. What is the change in total PPE (before accumulated depreciation) for the year ended Feb 2, 2003? What is the amount of cash provided (used) by investing activities for PPE for the year ended Feb 2, 2003? What is one possible explanation for the difference between these two amounts?

    Change in total PPE: Increase of $96,286,000

    Cash used by investing activities: $83,196,000

    One possible explanation is that the difference could have been financed by debt obligations.

    4. Compute its total asset turnover for the year ended Feb 2, 2003

    Total Asset Turnover = Sales/Total Assets

    =  491,549/410,487 = 1.197 times

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