Iowa Industries Inc ?
(1) Cash Additions to Property, Plant, and Equipment

question 36

Essay

Iowa Industries Inc.
Selected data from the financial statements of Iowa Industries Inc.for the years ended December 31,2018 and 2017,are presented below.Also,certain assumptions are presented.Use these data and assumptions to answer the questions that follow.
Assumptions:
$$\begin{array} { l r r } \text { (In millions) } & \underline { \mathbf { 2 0 1 8 } } & \underline { \mathbf { 2 0 1 7 } } \\\text { Property, pl ant and equipment } & \$ 11,142.3 & \$ 10,868.4 \\\text { Accumulated depreciation } & 3,519.0 & 3,461.0 \\\text { Investments } & 375.1 & 394.4 \\\text { Long-term debt } & 1,440.2 & 1,242.6 \\\text { Short-term debt } & 44.0 & 45.2 \\\text { Common stock } & 594.5 & 567.2 \\\text { Treasury - common stock } & ( 20.6 ) & ( 20.6 ) \\\text { Reinvested income (retained earnings) } & 3,522.9 & 3,425.9 \\\text { Net income } & 770.4 & 712.7\end{array}$$ ?
(1) Cash additions to property, plant, and equipment during 2018 were $\$ 550.0$ . An additional $\$ 86.2$ of plant assets were acquired through debt in a noncash transaction. Depreciation expense for 2018 was $\$ 343.3$ . Gains on disposals of property, plant, and equipment during 2019 were $\$ 27.7$ .

(2) The cash proceeds from the sale of investments in 2018 were $\$ 82.7$ . There was a $\$ 17.8$ gain on the sale of the investments.

(3) Proceeds from long-term debt issued during 2018 were $\$ 167.7$ .

(4) The issuance of common stock totaled $\$ 28.6$ in 2018 .

(5) During $2018 , \$ 389.4$ in cash was used to purchase and retire common stock. A total of $\$ 365.4$ of the cost was recorded as an increase to Reinvested Income.

(6) Net income, dividends declared/paid, and the $\$ 365.4$ amount in (5) were the only items that affected reinvested income during 2018. ?
-Review the data and assumptions for Iowa Industries Inc.
?
Required
(A)What was the cost of the property,plant,and equipment that was disposed of during 2018?
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(B)What was the amount of accumulated depreciation on the property,plant,and equipment disposed of during 2018?
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(C)Assuming that the book value of the property,plant,and equipment disposed of during 2018 was $76.9,what were the cash proceeds from the disposal of property,plant,and equipment for 2018?

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Definitions:

Ending Inventory

The total value of goods available for sale at the end of an accounting period, after all sales and purchases have been accounted for.

Accounting Period

A specific time frame for which financial statements are prepared, to measure the performance and financial position of a business.

Net Income

The total profit of a company after all expenses and taxes have been subtracted from revenue, indicating the company's financial performance over a specific period.

Specific Identification Method

An inventory costing method in which costs are assigned to individual items, enabling precise cost determination of goods sold and ending inventory.