Net Fixed Assets and Depreciation [L04] 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 FA - AD, show that the expression given in the chapter for net capital spending, NFAend - NFAbez +D (where D is the depreciation expense during the year), is equivalent to FAend - FAbeg- Use the following information for Taco Swell, Inc., for Problems 21 and 22 (assume the tax rate is 21 percent): 2017 2018 Sales $16,549 $18,498 Depreciation 2,376 2,484 Cost of goods sold 5,690 6,731 Other expenses 1,353 1,178 Interest 1,110 1,325 Cash S,676 9,247 Accounts receivable 11,488 13,482 Short-term notes payable 1,674 1,641 Long-term debt 29,060 35.229 Net fixed assets 72,770 77,610 Accounts payable 6,269 6,640 Inventory 20,424 21,862 Dividends 1,979 2,314 Financial Statements [LO1] Draw up an income statement and balance sheet for this company for 2017 and 2018. Calculating Cash Flow [LO4] For 201s, calculate the cash flow from assets, cash flow to creditors, and cash flow to stockholders.
Net Fixed Assets and Depreciation [L04] 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 FA - AD, show that the expression given in the chapter for net capital spending, NFAend - NFAbez +D (where D is the depreciation expense during the year), is equivalent to FAend - FAbeg- Use the following information for Taco Swell, Inc., for Problems 21 and 22 (assume the tax rate is 21 percent): 2017 2018 Sales $16,549 $18,498 Depreciation 2,376 2,484 Cost of goods sold 5,690 6,731 Other expenses 1,353 1,178 Interest 1,110 1,325 Cash S,676 9,247 Accounts receivable 11,488 13,482 Short-term notes payable 1,674 1,641 Long-term debt 29,060 35.229 Net fixed assets 72,770 77,610 Accounts payable 6,269 6,640 Inventory 20,424 21,862 Dividends 1,979 2,314 Financial Statements [LO1] Draw up an income statement and balance sheet for this company for 2017 and 2018. Calculating Cash Flow [LO4] For 201s, calculate the cash flow from assets, cash flow to creditors, and cash flow to stockholders.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Cost of Capital
Shareholders and investors who invest into the capital of the firm desire to have a suitable return on their investment funding. The cost of capital reflects what shareholders expect. It is a discount rate for converting expected cash flow into present cash flow.
Capital Structure
Capital structure is the combination of debt and equity employed by an organization in order to take care of its operations. It is an important concept in corporate finance and is expressed in the form of a debt-equity ratio.
Weighted Average Cost of Capital
The Weighted Average Cost of Capital is a tool used for calculating the cost of capital for a firm wherein proportional weightage is assigned to each category of capital. It can also be defined as the average amount that a firm needs to pay its stakeholders and for its security to finance the assets. The most commonly used sources of capital include common stocks, bonds, long-term debts, etc. The increase in weighted average cost of capital is an indicator of a decrease in the valuation of a firm and an increase in its risk.
Question
100%
![Net Fixed Assets and Depreciation [L04] 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 = FA –
AD, show that the expression given in the chapter for net capital spending, NFAend – NFAbez + D (where D is the
depreciation expense during the year), is equivalent to FAend - FAbeg
Use the following information for Taco Swell, Inc., for Problems 21 and 22 (assume the tax rate is 21 percent):
2017
2018
Sales
$16,549
$18,498
Depreciation
2,376
2,484
Cost of goods sold
5,690
6,731
Other expenses
1,353
1,178
Interest
1,110
1,325
Cash
S,676
9.247
Accounts receivable
11,488
13,482
Short-term notes payable
1,674
1,641
Long-term debt
29,060
35,229
Net fixed assets
72,770
77,610
Accounts payable
6,269
6,640
Inventory
20,424
21,862
Dividends
1,979
2,314
Financial Statements [LO1] Draw up an income statement and balance sheet for this company for 2017 and 2018.
Calculating Cash Flow [LO4] For 2018, calculate the cash flow from assets, cash flow to creditors, and cash flow to
stockholders.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F291d7af6-5c95-48bd-a4ac-1cfc8983e8c2%2F885bd1b5-5d23-4208-9c10-2c2a717adb4f%2Fbjvxuj_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Net Fixed Assets and Depreciation [L04] 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 = FA –
AD, show that the expression given in the chapter for net capital spending, NFAend – NFAbez + D (where D is the
depreciation expense during the year), is equivalent to FAend - FAbeg
Use the following information for Taco Swell, Inc., for Problems 21 and 22 (assume the tax rate is 21 percent):
2017
2018
Sales
$16,549
$18,498
Depreciation
2,376
2,484
Cost of goods sold
5,690
6,731
Other expenses
1,353
1,178
Interest
1,110
1,325
Cash
S,676
9.247
Accounts receivable
11,488
13,482
Short-term notes payable
1,674
1,641
Long-term debt
29,060
35,229
Net fixed assets
72,770
77,610
Accounts payable
6,269
6,640
Inventory
20,424
21,862
Dividends
1,979
2,314
Financial Statements [LO1] Draw up an income statement and balance sheet for this company for 2017 and 2018.
Calculating Cash Flow [LO4] For 2018, calculate the cash flow from assets, cash flow to creditors, and cash flow to
stockholders.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education