1.At the start of the year, Natalia used $10,000 of her savings to purchase a taxi. During the year she made a profit of $30,000. At the end of the year, the purchase price of similar taxis has increased to $20,000.

Calculate how much Natalia can withdraw from the business at the end of the year if she wants to maintain her:

a.Financial Capital

b. Physical Capital

2.Assume that an entity acquired 150 items of inventory at a cost of $10 each and sold 100 of the items for $15/each when the replacement cost to the entity was $12 each. Assume also that the replacement cost of the 50 remaining items of the inventory at year end was $14.

a.Calculate the holding gain.

b.Determine the realized holding gain and the unrealized holding gain.