24. Net Fixed Assets and Depreciation On the balance sheet, the net fixed assets (NFA) account is equal to the gross fixed assets (FA) account (which records the acquisition cost of fixed assets) minus the accumulated depreciation (AD) account (which records the total depreciation taken by the firm against its fixed assets). Using the fact that NFA = FAAD, show that the expression given in the chapter for net capital spending, NFAend - NFAbeg + D (where D is the depreciation expense during the year), is equivalent to FAend - FAbeg.

24. Net Fixed Assets and Depreciation On the balance sheet, the net fixed assets (NFA) account is equal to the gross fixed assets (FA) account (which records the acquisition cost of fixed assets) minus the accumulated depreciation (AD) account (which records the total depreciation taken by the firm against its fixed assets). Using the fact that NFA = FAAD, show that the expression given in the chapter for net capital spending, NFAend - NFAbeg + D (where D is the depreciation expense during the year), is equivalent to FAend - FAbeg.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter2: Introduction To Financial Statements

Section: Chapter Questions

Problem 17MC: Working capital is an indication of the firms ________. A. asset utilization B. amount of noncurrent...

See similar textbooks

Similar questions

9.Working capital is calculated as: Select one: Current assets plus current liabilities Current assets less current liabilities Assets less current liabilities Assets less liabilities
Working capital represents the portion of current assets financing through long term funds. This indicates 1. Net Working Capital 2. Gross Working capital Select one: O a. 2 is correct O b. Both 1 and 2 are correct O c. 1 is correct O d. Neither of the two are correct
The monetary value of the net assets is reported at its historical cost on the balance sheet? a. physical capital b. excess capital c. net capital d. financial capital
7. Net Working Capital is the difference between Current Assets andLong-Term Liabilities. T/F 8. APR takes into consideration compounding, whereas EAR does notfactor in compounding. T/F
Choose the correct. The cost of debt capital is calculated on the basis of: A. Net proceeds B. Annual Interest C. Capital D. Arumal Depreciation
Working Capital Management is concerned with management of Select one: a. Long term capital b. Current Assets c. Profits d. Fixed Assets
Which of the following is the correct formula for calculating rate of return on total assets? A. (Net income minus− Interest expense) / Average total asset B. Total equity / Total assets C. (Net income + Interest expense) / Average total assets D. (Net income minus− Interest expense) / Total assets
42. For the ratio Return on Capital Employed, which of the following best describes capital employed? A. Share capital B. Share capital + reserves C. Share capital + reserves + long-term capital D. Share capital + reserves + long-term capital + current liabilities
A. Which of the following is most closely associated with the cost of using assets? a. Asset utilization b. Sales revenue c. Proportion of debt and equity d. Average price B. Which of the following is most closely associated with the return on management’s use of assets? a. Cost of capital b. Mix of equity types c. Prime lending rate d. # of products sold
Working capital is an indication of the firms ________. A. asset utilization B. amount of noncurrent liabilities C. liquidity D. amount of noncurrent assets
11. Which type of financial assets are purchased only with the intent of selling them in the near future? DAFVTPL financial assets ⒸBFVTOCI Financial assets C. Amortized Cost financial assets OD. Investment accounted for using the equity method
While calculating Free Cash Flow (FCF), capital investment expenditure is : a Subtracted from from EBIT(1-t) +(Depreciation +Amortization) b Subtracted from EBT. c Subtracted from EBIT(1-t) d Subtracted from EBIT.