Deciphering Financial Statements (Ford Motor Company)
The following information comes from the 2004 financial statements of Ford Motor Company (all dollar amounts are in millions):
|
|
2004 |
2003 |
|
Land |
$ 727 |
$ 675 |
|
Buildings and land improvements |
12,598 |
12,204 |
|
Machinery, equipment and other |
46,387 |
44,449 |
|
Construction in progress |
2,089 |
2,647 |
|
Total land, plant and equipment |
$ 61,801 |
$ 59,975 |
|
Accumulated depreciation |
(31,013) |
(30,048) |
|
Net land, plant and equipment |
$ 30,788 |
$ 29,927 |
|
Statement of Cash Flows for 2004 |
|
|
|
Operating activities: |
|
|
|
Depreciation |
$ 3,242 |
|
|
Investing activities: |
|
|
|
Capital expenditures |
(6,287) |
|
1. Estimate the book value of property and equipment disposed of during 2004.
2. Assume that a half year’s depreciation is taken on all assets acquired and disposed of during the year. Estimate the average depreciation life of Ford’s property and equipment. Assume that none of the disposals was land, and eliminate the land balance when estimating the average depreciation life.
3. Estimate the average age of property and equipment (excluding land) owned by Ford as of December 31, 2004.