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You have compiled the following information on the Shoe Store: 2016 2017 Assets Cash$214 $187 Accounts receivable 1,306 1,259 Inventory 1,847 2,048 Net fixed assets 3,511 3,287 Total assets$6,878 $6,781 Liabilities and Equity Accounts payable$1,414 $1,632 Other current liabilities 624 598 Long-term debt 1,320 1,264 Stockholders' equity 3,520 3,287 Total liabilities and equity$6,878 $6,781 Sales $6,238 Cost of goods sold 2,789 General and administrative 847 Depreciation 415 EBIT $2,187 Interest 90 EBT $2,097 Taxes 713 Net income $1,384 What is the amount of the net capital spending for 2017? Multiple Choice -$224 $224 $191 $362 $639
You have compiled the following information on the Shoe Store:
2016 2017 Assets Cash$214 $187 Accounts receivable 1,306 1,259 Inventory 1,847 2,048 Net fixed assets 3,511 3,287 Total assets$6,878 $6,781 Liabilities and Equity Accounts payable$1,414 $1,632 Other current liabilities 624 598 Long-term debt 1,320 1,264 Stockholders' equity 3,520 3,287 Total liabilities and equity$6,878 $6,781 Sales $6,238 Cost of goods sold 2,789 General and administrative 847 Depreciation 415 EBIT $2,187 Interest 90 EBT $2,097 Taxes 713 Net income $1,384
What is the amount of the net capital spending for 2017?
Multiple Choice
- -$224
- $224
- $191
- $362
- $639
Expert Solution
Computation of Net Capital Spending for 2017:
Net Capital Spending = Increase in Net Fixed Asset + Depreciation
= ($3,287 - $3,511) + 415
= -$224 + $415
Net Capital Spending for 2017 = $191
So, the correct option is 3rd "$191".
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